iiiilliliiiiiiiii^^ 


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AMERICA 

and  the 
NEW  EPOCH 


0 


CHARLES  P.  STEINMETZ.  A.M..  Ph.D. 


HARPER    6*     BROTHERS 

PUBLISHERS 
NEW    YORK   AND    LONDON 


-3^n  "^"V 


America  and  tiik  New  Epoch 


Copyriglit,    1916,  by   Harper  &   Brothers 

Printed  in  the  United  States  of  America 

Pubhshed  October,  1916 

C-R 


Ju 


CONTENTS 

CHAP.  PAGE 

Introduction v 

I.  Era3  in  the  World's  History 1 

II.  The  Epoch  of  the  French  Revolution      ...  13 

III.  The  Individualistic  Era:  From  Competition  to 

Co-operation 19 

IV.  The  Individualistic  Era:  The  Other  Side     .     .    44 
v.         England  in  the  Individualistic  Era      .    .     .     .     G3 

VI.  Germany  in  the  Individualistic  Era      ....    74 

VII.  The  Other  European  Nations  in  the  Individual- 

istic Era        87 

VIII.  America  in  the  Past 103 

IX.  America  in  the  Individualistic  Era       .     .     .     .119 

X.  PuBUc   AND   Private   Corporations 132 

XI.  Democracy  and  Monarchy 142 

XII.  Evolution:  Political  Government 150 

XIII.  Evolution:  Industrial  Government        ....  164 

XIV.  Evolution:  Inhibitory  Power 177 

XV.  The  American  Nation 188 

XVI.  The  Future  Corporation       199 

XVII.  Conclusion 217 


INTRODUCTION 

The  following  does  not  represent  my  senti- 
ments, but  gives  the  conclusions  drawn  from 
the  historical  facts  which  of  necessity  follow 
from  the  preceding  causes,  regardless  whether 
we  like  them  or  dislike  them. 

Sentiment  has  nothing  to  do  with,  can  exert 
no  influence  on,  the  phenomena  of  nature,  on  the 
workings  of  nature's  laws,  whether  it  be  the 
cosmic  laws  which  let  winter  follow  summer, 
regardless  whether  we  wish  it  or  not,  or  the 
economic  laws  which  plunged  the  world  into 
war  with  England  and  Germany  as  pro- 
tagonists, irrespective  whether  we  are  pa- 
cificists or  militarists,  pro-German  or  pro- 
English. 

In  judging  on  the  meaning  of  historical 
facts,  on  events  which  we  see  occurring  before 
our  eyes,  we  must  entirely  set  aside  our  senti- 
ments and  our  wishes,  and,  like  in  any  physical 
or  engineering  problem,  draw  the  conclusions 
which  follow  from  tlie  premises,  whether  they 


INTRODUCTION 

are  agreeable  or  not.  If  we  do  so,  and  record 
the  facts  and  search  back  to  their  causes,  we 
very  soon  find  that  there  is  nothing  in  this 
world  which  we  can  condemn,  but  that  the 
attitude  of  mind  of  condemning  one  thing, 
approving  another,  is  illogical,  as  bringing  the 
personal  element  of  our  egotism  into  the  chain 
of  cause  and  effect.  If  we  do  so,  we  have  dis- 
franchised ourselves  from  the  community  of 
reasoning  intellects,  and  then  we  assuredly  will 
be  led  astray,  and  our  conclusions  will  be  prej- 
udiced and  wrong.  But  if  we  set  aside  our 
personal  relations  and  our  personal  interests,  we 
find  that  nothing  that  is  or  that  has  happened 
can  be  condemned,  but  everything  is  the  neces- 
sary result  of  causes  which  have  brought  it 
about,  and  back  of  these  causes  we  find  other 
causes  and  so  by  the  chain  of  cause  and  effect 
everything  that  is  is  traced  beyond  the  per- 
sonal element  of  the  actors  taking  part  in  the 
event. 

Thus,  if  the  reader  docs  not  like  many  of  the 
statements  given  in  the  following,  I  also  do 
not  like  many  of  the  conclusions  which  I  had 
to  draw;  but,  nevertheless,  they  are  and  re- 
main the  conclusions  which  follow  from  the 
physical,  economic,  and  social  facts,  and  I  be- 


INTRODUCTION 

lieve  I  had  an  unusual  opportunity  of  observa- 
tion from  all  sides  of  the  politico-industrial 
structure  of  to-day. 

Born  and  educated  in  Germany,  of  German 
and  Polish  descent,  I  have  lived  most  of  my 
life  in  America,  as  an  American  citizen.  The 
Germany  of  my  recollection  is  the  agricultural 
Germany  of  a  bygone  age,  but  the  industrial 
Germany  of  to-day  has  remained  a  foreign 
country  to  me,  while  I  have  numerous  good 
friends  in  England. 

When  I  came  to  this  country,  nearly  a  genera- 
tion ago,  everything  was  strange  to  me,  thus 
impressed  itself  on  my  memory  far  more  strong- 
ly than  it  would  on  a  native  who  had  grown  up 
under  these  conditions,  and,  therefore,  in  com- 
paring the  conditions  of  our  country  of  to-day 
with  those  of  a  generation  ago,  I  can  see  the 
enormous  changes  which  have  taken  place. 

As  socialist,  I  took  an  active  part  in  the  ten 
years'  political  war  of  the  German  social  democ- 
racy against  Bismarck,  succeeded  in  escaping 
to  Switzerland,  when  the  Government  tried  to 
arrest  me,  and,  after  continuing  my  studies  there, 
came  to  America.  I  have  always  retained  my 
interest  in  public  welfare  and  politics,  have  held 
and  am  holding  political  office  in  my  home 


INTRODUCTION 

town,  and  am  still  dues-paying  member  of  the 
Socialist  party  organization. 

When  I  landed  at  Castle  Garden,  from  the 
steerage  of  a  French  liner,  I  had  ten  dollars  and 
no  job,  and  could  speak  no  English.  Now, 
personally  I  have  no  fault  to  find  with  existing 
society;  it  has  given  me  everything  I  wanted; 
I  have  been  successful  professionally,  in  en- 
gineering, and  have  every  reason  to  be  personally 
satisfied,  and  the  only  criticism  which  I  can 
make  is  that  I  would  far  more  enjoy  my  ad- 
vantages if  I  knew  that  everybody  else  could 
enjoy  the  same. 

For  several  years  I  was  employed  by  a  small 
manufacturer;  then  for  nearly  a  quarter  of  a 
century  with  a  huge  manufacturing  corpora- 
tion, and  helped  make  it  what  it  is  to-day. 
Thus  I  have  seen  the  working  of  small  individ- 
ualistic production — where  every  cent  increase 
of  wages  appears  so  much  out  of  the  pockets 
of  the  owner — and  of  corporate  production, 
and  have  realized,  from  my  acquaintance  with 
the  inside  workings  of  numerous  large  corpora- 
tions, that  the  industrial  corporation  is  not  the 
greedy  monster  of  popular  misconception,  bent 
only  on  exploitation,  and  have  most  decidedly 
come  to  the  conclusion  that,  even  as  crude  and 


INTRODUCTION 

undeveloped  as  the  industrial  corporation  of 
to-day  still  is  in  its  social  activities,  if  I  were 
an  unknown  and  unimportant  employee  I 
would  far  rather  take  my  chances  with  the 
impersonal,  huge  industrial  corporation  than 
with  the  most  well-meaning  individual  em- 
ployer. 

Charles  P.  Steinmetz. 
August,  1916. 


AMERICA  AND    THE 
NEW    EPOCH 


AMERICA   AND   THE 
NEW   EPOCH 

I 

ERAS   IN   THE   WORLD's   HISTORY 

WHILE  this  is  being  written  the  world's 
war  is  entering  its  third  year,  and  no 
entl  to  the  catastrophe  is  yet  in  sight. 
.  All  attempts  to  explain  the  cause  of  the  dis- 
aster have  failed:  the  assassination  of  the 
Austrian  Crown  Prince,  the  violation  of  Bel- 
gium's neutrality.  Slavish  expansion,  Prussian 
militarism,  British  greed  alike  do  not  explain. 
The  assassination  of  the  Austrian  Crown 
Prince  may  have  justified  a  punitive  expedition 
against  Servia,  but  not  that  Russia,  England, 
and  France  come  to  the  assistance  of  the 
assassins. 

The  violation  of  the  neutrality  of  Belgium 
I 


AMERICA  AND  THE  NEW  EPOCH 

does  not  appear  acceptable  to  an  American  as 
explanation  of  England's  entrance  into  the  war. 
It  would  imply  that  the  American's  moral  sense 
is  so  inferior  to  that  of  the  Englishman  that 
the  latter  went  to  war  for  a  moral  issue,  while 
beyond  mere  academic  condemnation  not  a 
single  voice  was  raised  in  America  for  war  in 
defense  of  Belgium;  nay,  such  obligation  was 
expressly  disclaimed. 

The  battle  lines  between  Slav  and  German 
have  been  wavering  to  and  fro  in  the  East  for 
over  fifteen  centuries  without  kindling  a  world's 
war,  and  while  the  old  fight  for  the  ground,  be- 
tween Slav  and  German,  would  flare  up  with 
renewed  intensity  as  incident  of  a  world's  war, 
it  cannot  be  the  cause. 

Prussian  militarism  and  British  greed — or,  in 
the  language  of  the  neutral  mind,  German  or- 
ganization and  England's  financial  interests — as 
causes  of  the  war  explain  nothing,  but  leave  the 
questions:  What  created  Germany's  powerful 
centralized  organization?  Why  were  England's 
financial  interests  threatened  by  Germany .^^ 

W^ith  the  failure  of  finding  a  satisfactory 
cause  for  the  war  we  are  forced  to  realize  that 
we  stand  before  one  of  those  inevitable  catas- 
trophes in  the  liistory  of  the  human  race,  that 


ERAS  IN  THE  WORLD'S  HISTORY 

we  are  passing  through  one  of  those  historical 
epochs  which  have  clianged  the  organization  of 
human  society,  an  epoch  Hke  that  which,  begin- 
ning in  the  August  night  of  1789,  with  the 
declaration  of  the  rights  of  man,  liberie,  egal- 
ite,  f rater 7iiie,  and  ending  on  the  battle-field  of 
Waterloo,  changed  the  world  from  feudalism 
to  industrial  capitalism,  or  that  earlier  epoch 
of  the  migration  of  the  German  tribes,  which 
buried  the  classic  civilization  of  ancient  times 
under  the  ruins  of  the  Roman  Empire  and  es- 
tablished the  feudal  society  of  the  Middle  Ages, 
or  that  still  earlier  epoch  before  the  dawn  of 
history  when  the  Aryan  migration  ended  the 
neolithic  age  and  laid  the  foundation  of  the 
classic  civilization. 

We  know  nothing  about  the  social  condition 
before  the  Aryan  migration.  When  the  Aryans 
came  they  came  as  conquerors,  the  conquered 
autochthons  became  rightless  slaves,  Helots,  la- 
boring for  the  conqueror-citizens  as  masters, 
and  so  all  ancient  civilization,  Egypt  and  Baby- 
lon, Hellas  and  the  Macedonian  empires,  and 
finally  their  culmination  in  the  Roman  Empire, 
were  based  on  slavery — a  rightless  class  of 
slaves  doing  all  the  work,  a  citizen  class  sup- 
ported by  slave  labor  and  thus  having  its  time 


AMERICA  AND  THE  NEW  EPOCH 

free  for  war,  administration,  or  art,  whatever 
the  national  character  and  inclination,  and  a 
class  of  free  men  without  rights  and  power,  de- 
spised alike  by  slave  and  slave-owner,  but  con- 
sidering themselves  vastly  above  the  slaves,  and 
serving  the  masters  as  slave-drivers,  managers, 
etc.{perioikoi — libertini — the  "poor  white  trash" 
of  our  own  classic  civilization  of  the  South). 

In  the  classic  era  art  rose  to  heights  never 
approached  since,  and  in  the  Roman  Empire 
was  accomplished  what  the  world  has  never 
experienced  since — universal  peace  for  several 
centuries. 

But  the  classic  era  finally  came  to  an  end, 
not  by  overthrow,  but  by  internal  decay:  the 
Roman  Empire,  based  on  the  labor  of  the 
conquered  nations,  failed  to  conserve  the  source 
of  its  strength,  the  people  which  it  exploited. 
So  nation  after  nation  was  exhausted,  while 
race  suicide  destroyed  the  ruling  classes.  So 
the  purple  passed  from  Italy  to  France;  Spain, 
the  Balkan  nations,  Africa,  and  Asia,  even  far- 
away England  supplied  emperors;  but  hardly 
any  of  the  later  Roman  emperors  was  of  Roman 
descent. 

In  the  second  great  epoch  of  human  history, 
when  the  "barbarians"  finally  destroyed  the 


ERAS  IN  THE  WORLD'S  HISTORY 

Roman  Empire  and  founded  their  own  nations, 
it  was  an  empty  shell  which  they  destroyed — 
the  life  of  the  ancient  civilization  had  long 
gone  out. 

The  state  of  the  barbarians  which  overran 
the  Roman  Empire  was  the  tribal  organization, 
an  aristocratic  democracy;  that  is,  a  nation  of 
free  and  equal  citizens,  composed  of  families 
differing  more  or  less  in  social  standing,  by 
their  history,  their  prowess,  influence,  etc.,  and 
led,when  leadership  appeared  necessary, bj^  some 
prominent  male  member  of  the  most  influential 
leading  family,  but  accepting  the  leadership  vol- 
untarily, without  recognizing  any  right  to  rule. 

Such  was  the  foundation  on  which  later  feu- 
dalism was  built. 

When  these  tribes  overran  the  Roman  Em- 
pire, their  relations  to  the  conquered  "Romans" 
necessarily  were  very  different  from  those  of 
the  Aryans  to  their  predecessors.  There  could 
be  no  question  of  slavery.  The  German  bar- 
barians had  for  so  many  generations  obeyed  the 
orders  of  the  Roman  Empire,  as  servants,  aux- 
iliaries, and  mercenaries,  had  lived  so  long 
under  the  glamour  of  the  Roman  Empire,  that 
when  the  relations  reversed,  and  the  barbarians 

became  the  masters,  it  was  inconceivable  for 

5 


AMERICA  AND  THE  NEW  EPOCH 

them  to  make  slaves  out  of  their  former  masters, 
but  these  gradually  merged  into  and  modified 
the  barbarian  tribal  organization;  the  masses 
became  the  tillers  of  the  soil,  the  educated 
classes  acquired  a  position  within  and  still  out- 
side of  the  tribal  organization,  as  the  "clergy," 
and  so  the  feudal  societj^  of  the  Middle  Ages 
was  born,  by  the  amalgamation  of  the  con- 
quered nations  with  the  conquering  German 
barbarians. 

Feudalism  inherently  recognized  no  slavery, 
but  all  people  had  some  rights,  though  different 
according  to  their  occupation,  their  station  in 
society,  from  the  tiller  of  the  land,  who  was 
bound  to  the  soil,  to  the  lord  of  the  manor, 
who  was  supported  by  the  tribute — the  "tenth" 
— of  the  former,  but  who  in  his  turn  had  to  pro- 
tect the  former  from  enemies,  and  had  to  do 
service  to  his  overlord. 

A  permanent  classification  of  society  was 
thus  established,  with  the  three  main  classes: 
the  common  people,  or  tillers  of  the  soil  and 
artisans;  the  nobility,  or  warrior  class;  and  the 
clergy,  or  educated  class.  Each  class  was  sub- 
divided again  into  numerous  grades,  from  the 
county  squire  to  the  duke  and  king,  and  the 
"classes"  of  feudal  society  never  were  "castes," 


ERAS  IN  THE  WORLD'S  HISTORY 

as  to-day  in  India,  but  there  was  always  tlie 
possibility  of  rising  from  one  class  into  a  higher 
one,  however  difficult  this  may  have  been  some 
time  in  the  later  Middle  Ages,  and  there  was 
always  the  danger  of  dropping  down  into  a 
lower  class. 

Feudalism  was  fairly  satisfactory  as  long  as 
it  remained  a  commensal  organism — that  is,  all 
classes  gave  and  received;  the  tiller  of  the  soil 
received  protection  from  the  feudal  lord  in  ex- 
change for  his  tribute  of  a  part  of  his  harvest, 
the  feudal  lord  gave  protection  to  the  tiller  of 
the  soil  in  exchange  for  the  tribute  received, 
and  gave  military  service  to  his  overlord  in 
exchange  for  protection  against  his  enemies; 
the  clergy  took  charge  of  the  intellectual  and 
religious  life,  etc. 

But  feudalism  was  an  organization  adapted 
to  an  essentially  agricultural  society,  and  there 
was  no  place  within  it  for  industry,  manufac- 
ture, and  commerce,  and  when,  in  the  later 
Middle  Ages,  arts  and  industries  developed  in 
the  cities,  when  the  crusades  and  later  on  the 
African,  Indian,  and  American  discoveries  de- 
veloped commerce,  conditions  arose  with  which 
the  feudal  organization   of  society   could  not 

cope. 

7 


AMERICA  AND  THE  NEW  EPOCH 

Thus  in  the  industrial  cities  of  central  Europe, 
of  Italy,  and  later  England,  the  development 
proceeded  away  from  feudalism,  toward  a  form 
of  society  very  much  akin  to  that  of  the  later 
individualistic  era  after  the  French  Revolution. 
The  feudal  city  governments — the  patrician 
families — were  overthrown  by  the  industrial 
organization  of  artisans  and  merchants,  the 
guilds,  and  democratic  industrial  governments 
established.  Powerful  free  cities  and  feder- 
ations of  free  cities,  as  the  Ilansa,  arose,  broke 
away  from  feudalism — especially  when  the  in- 
vention of  gunpowder  made  the  armored 
knight  helpless — and  started  a  new  era. 

In  England,  protected  by  the  ocean,  this  re- 
organization of  society,  although  starting  much 
later  than  on  the  Continent,  survived  and  grad- 
ually merged  by  evolution  into  the  individual- 
istic age. 

This  is  England's  strength,  as  well  as  her  weak- 
ness. Derived  by  gradual  evolution  through 
centuries,  the  indivichialistic  industrial  age  is 
far  deeper  rooted  in  the  national  character  than 
in  nations  which  have  more  recently  emerged 
from  feudalism.  But,  on  the  other  hand,  nu- 
merous remnants  of  feudalism  have  survived, 
such  as  the  respect  for  lords,  the  reverence  for 


ERAS  IN   THE   WORLD'S   HISTORY 

titles,  etc.,  which  have  been  swept  away  in 
nations  where  the  transition  has  been  of  more 
revolutionary  character. 

On  the  Continent,  feudalism  once  more  tri- 
umphed over  the  industrial  city. 

With  increasing  subdivision  and  specializa- 
tion of  classes,  feudalism  finally  reached  its  last 
development  in  the  absolute  monarchy.  The 
"retainers"  of  the  lord  of  the  manor  became 
the  army  of  mercenaries  of  the  duke  or  king. 
The  king  thus  became  independent  of  the  vol- 
untary service  of  the  feudal  lords,  the  noblemen. 
Against  the  army  of  mercenaries,  maintained 
by  the  ruler,  the  individual  lord  or  the  indus- 
trial city  had  little  chance,  and  were  reduced  to 
submission. 

In  the  perpetual  wars  between  the  merce- 
nary armies  maintained  by  the  more  powerful 
rulers,  culminating  in  the  Thirty  Years'  War, 
central  Europe  was  laid  waste,  the  beginning  of 
the  new  industrial  era  wiped  out  with  the  de- 
struction of  the  prosperity  of  the  cities,  and  the 
absolute  feudal  monarchy  emerged,  as  exem- 
plified in  the  "grand  monarch,"  Louis  XIV.  of 
France;  the  monarch  was  the  state — L'etat 
c'est  mot — but  beneath  him  there  was  an  infi- 
nite graduation  from  the  highest  to  the  lowest 


AMERICA  AND  THE  NEW  EPOCH 

nobility,  parallel  thereto  the  clergy,  and  far 
beneath  the  rightless  toiling  masses. 

But  in  this  development  of  the  absolute  mon- 
archy based  on  mercenary  armies,  feudalism 
had  ceased  to  be  commensal,  and  therewith  for- 
feited its  right  of  existence.  The  armies  of 
mercenaries  had  made  the  ruler  independent  of 
the  good-will  of  his  subjects.  The  enormous 
cost  of  the  large  armies  of  mercenaries  required 
in  the  perpetual  wars,  the  cost  of  maintaining 
the  estate  of  the  "grand  monarch,"  the  need  of 
attaching  the  nobility  to  the  court  by  sharing 
the  spoils  with  them,  all  this  meant  continu- 
ously increasing  exploitation  of  the  people,  and 
for  the  masses  it  was  no  more,  as  in  the  early 
'days  of  feudalism,  exchange  of  protection  for 
a  part  of  the  product  of  their  work,  but  it  was 
exploitation  by  everybody,  ceaseless  toil  and 
no  hope,  and  to  the  masses  the  feudal  society 
of  the  "grand  monarch"  offered  nothing.  There- 
fore they  had  no  interest  in  the  maintenance  of 
this  society,  their  lot  could  not  become  worse 
by  any  overthrow  of  society,  and  all  their  inter- 
ests thus  were  against  society,  and  became  rev- 
olutionary. 

When  incompetent  and  weak  rulers  followed 
the  "grand  monarch,"  the  storm  broke,  and  in 

10 


ERAS  IN  THE  WORLD'S  HISTORY 

the  great  revolution  feudalism  was  submerged 
and  France  gave  the  world  a  new  era,  that  of 
individualism,  or  industrial  capitalism,  as  we 
may  call  it  by  its  present-day  characteristics. 

Other  developments  contributed  to  the  catas- 
trophic change  in  the  epoch  of  the  French  Rev- 
olution, which  overthrew  feudalism. 

The  individualism  of  the  industrial  cities  had 
been  vanquished  in  the  wars  of  the  mercenary 
armies,  but  not  entirely  extinguished,  and  from 
the  cities  gradually  permeated  all  society. 

The  steadily  deteriorating  condition  of  the 
masses,  and  parallel  thereto  the  degeneration  of 
the  ruling  classes,  created  an  increasing  disgust 
with  the  existing  form  of  society  among  the 
better  elements  of  tlie  privileged  classes;  we 
must  realize  that  in  the  declaration  of  the  rights 
of  man,  which  started  the  revolution,  the  nobil- 
ity and  clergy  voluntarily  gave  up  their  privi- 
leges over  the  tiers  eiat. 

The  invention  of  the  steam-engine  had  come 
and  had  begun  to  revolutionize  society;  com- 
merce and  trade  rose  to  increasing  power;  Eng- 
land had  solved  the  problem  of  feudalism  by  be- 
heading one  king  and  giving  the  walking-papers 
to  the  next  one  who  had  started  to  play  the 

"grand  monarch,"  and  had  brought  a  king  from 

11 


AMERICA  AND  THE  NEW   EPOCH 

abroad,  with  the  impHed  understanding  that 
he  would  follow  his  predecessor  if  he  took  him- 
self too  seriously;  and  England  was  gradually 
beginning  to  emerge  as  an  industrial  nation. 

The  American  colonies  had  revolted  and  set 
up  a  democracy,  declaiming  that  "all  men  are 
born  free  and  equal." 

Prussia,  under  Frederic  II.,  had  established 
compulsory  education,  had  educated  all  her 
subjects,  and  then  had  withheld  political  rights 
from  them. 

The  philosophy  of  Voltaire  and  his  contem- 
poraries had  with  destructive  logic  attacked  all 
accepted  standards,  from  royalty  to  religion, 
and  shattered  the  self-confidence  of  the  defend- 
ers of  established  order,  and  the  renaissance  of 
literature  had  spread  the  modern  ideas  through 
wide  circles. 


II 

THE  EPOCH  OF  THE  FRENCH  REVOLUTION 

THE  fire  which  consumed  feudalism  was 
kindled  in  the  French  parliament,  called 
together  when  the  feudal  monarchy,  bankrupt 
by  ineflSciency  and  extravagance,  had  arrived 
at  the  end  of  its  rope.  The  declaration  of  the 
rights  of  man,  made  in  the  August  night  of 
1789,  ranges  with  the  Magna  Charta  and  our 
Declaration  of  Independence  as  one  of  the 
greatest  documents  of  human  history. 

It  wiped  out  all  privilege. 

It  demanded  the  freedom  of  the  fullest  in- 
dividual development  for  all  human  beings — 
liberie. 

It  established  equal  rights  before  the  law  for 
all — egalite. 

The  last  demand,  brotherhood  of  man,  fra- 
ternitc,  was  promptly  forgotten  for  another 
century. 

The  great  revolution  was  bloodless,  the  privi- 

13 


AMERICA  AND  THE  NEW  EPOCH 

leged  classes  voluntarily  resigned  their  special 
rights. 

This  was  the  beginning  of  the  great  epoch 
which  ushered  in  the  new  era  of  modern  society. 
It  almost  was  the  end.  Immediately  all  the 
enemies  of  progress,  all  the  powers  of  darkness 
and  reaction,  sprang  to  arms  against  France, 
the  pron>ulgator  and  defender  of  the  new  idea. 
Internal  enemies  arose  everywhere  in  France, 
even  the  royal  court  conspired  with  the  coun- 
try's enemies.  Europe's  greatest  military  power, 
the  Prussian  army,  invaded  France  in  the 
north;  the  Austrian  and  German  army  in  the 
south;  rebellions  flared  up;  never  was  a  nation 
in  so  desperate  condition.  Even  England, 
though  already  on  the  path  toward  the  new 
era,  joined  the  enemies  of  progress,  and  con- 
sistently throughout  the  entire  epoch  fought 
the  battle  of  feudalism  against  the  new  era  of 
individualism.  It  was  a  full  generation  later, 
when  the  unholy  alliance  of  Austria,  Russia,  and 
Prussia  had  again  welded  the  world  into  the 
fetters  of  feudalism,  that  England  finally  woke 
up  and  made  the  first  breach  in  the  chain  by 
sinking  the  Turkish  fleet  at  Navarino  and  so 
setting  the  Greeks  free,  while  the  new  nation  of 
the  Western  Hemisphere  threw  down  the  gant- 

14 


EPOCH  OF  THE  FRENCH  RvyvOLUTION 

let  to  feudalism  by  the  declaration  of  the 
Monroe  Doctrine. 

But  in  the  early  days  of  the  epoch  it  was 
France  alone  against  the  world.  Then  France 
showed  that  a  nation,  inspired  by  a  single  great 
and  progressive  idea,  can  defy  the  world  and 
conquer.  The  guillotine  cleared  France  from 
traitors  and  internal  enemies.  The  Prussian 
army  was  ignominiously  defeated  in  the  Ar- 
gonnes,  the  Austrian  army  vanquished;  in 
the  Gironde  the  rebels  hunted  down;  Toulon 
fell  and  was  punished  for  making  common 
cause  with  the  country's  enemies,  and  soon  the 
French  armies  rolled  over  central  Europe, 
bringing  freedom  and  equal  rights  to  the  na- 
tions. Prussia  and  Austria  were  humiliated, 
and  under  the  dictator  Napoleon  the  lesson 
taught  to  the  world  that  there  is  nothing  sacred 
or  superior  in  royalty,  and  kings  and  rulers 
were  made  and  unmade  at  the  whim  of  the 
country  lawyer's  son,  the  Emperor  Napoleon; 
and  some  of  Europe's  most  aristocratic  rulers 
of  to-day  are  the  descendants  of  common  folk, 
put  on  the  throne  by  the  country  lawyer's 
son. 

The  Russian  winter — not  the  Russian  army — 
broke  the  spell  of  victory  of  France,  and  on  the 


AMERICA  AND  THE  NEW  EPOCH 

battle-field  of  Waterloo  finally  tlie  Prussian 
army  under  Blueclier  saved  tlie  British  army 
and  turned  defeat  into  victory,  and  France  was 
conquered. 

But  not  so  the  new  idea.  The  defeat  of 
France  had  become  possible  only  by  the  adop- 
tion of  the  new  idea  of  liberty  and  individual- 
ism, for  which  France  had  fought.  After  the 
defeat  of  Jena,  when  Prussia  was  at  its  lowest 
depths,  Stein,  Scharnhorst,  Gneisenau  had  re- 
organized the  Prussian  nation,  introduced  the 
new  ideas,  and  it  was  a  new  Prussia,  the  Prussia 
of  the  new  era,  which  rose  and  defeated  Na- 
poleon. 

Thus,  while  France  was  defeated,  the  ideas 
which  France  had  given  to  the  world  con- 
quered. 

It  is  true,  after  Waterloo  a  temporary  reac- 
tion set  in.  In  unholy  alliance,  Austria,  Rus- 
sia, and  Prussia,  together  with  the  restored 
Bourbon  France,  tried  to  re-establish  feudalism. 
But  in  1830  France  broke  away,  under  the 
bourgeois  king,  Louis  Philippe,  and  in  1848  the 
revolution  swept  over  Europe  and  swept  away 
the  last  remnant  of  feudalism.  Except  in 
Prussia.    There  the  revolution  was  a  draw,  and 

feudalism  kept  fighting  on  until  the  great  par- 

16 


EPOCH  OF  THE   FRENCH   REVOLUTION 

liamentary  fight  in  the  early  CO's,  when  year 
after  year  the  Prussian  parhament  refused  the 
Government  all  budget  appropriations,  while 
the  monarch  disregarded  the  constitution  and 
continued  to  govern  without  parliament. 

The  controversy  was  finally  compromised 
after  the  victorious  war  of  Prussia  against  Aus- 
tria, and  the  formation  of  the  North  German 
Customs  Union  in  1866.  The  entrance  of  the 
other  German  states,  in  which  capitalism  was 
further  advanced  in  power  than  in  Prussia,  in- 
duced Bismarck  to  make  concessions,  while  on 
the  other  side  the  beginning  danger  of  the  social 
democracy  made  capitalism  more  inclined  tow- 
ard compromise  with  the  monarchical  govern- 
ment. 

It  is  important  to  realize  this  historical  de- 
velopment as  it  laid  the  foundation  of  the  or- 
ganization which  brought  about  the  present 
world's  war. 

While  individualism,  in  the  form  of  industrial 
capitalism,  has  never  completely  conquered  in 
Prussian  Germany,  it  has  early  conquered  and 
ruled  supremely  in  England. 

The  history  of  the  world  is  the  history  of  in- 
dustry, arts,  and  commerce,  and  war  and  revo- 
lution, conquest  and  defeat,  are  merely  the  out- 

17 


AMERICA  AND  THE  NEW  EPOCH 

ward  appearances,  the  signs  or  mark-stones  of 
the  true  history  of  the  human  race,  which  is 
made  on  the  fields  and  farms,  in  the  factories 
and  workshops,  in  the  business  houses  and 
shipping-offices. 


Ill 


THE    INDIVIDUALISTIC    ERA:    FROM    COMPETITION 
TO   CO-OPERATION 

THE  epoch  of  the  French  Revolution,  ush- 
ered in  by  the  declaration  of  the  rights  of 
man — liherte,  egalite,  fraternite — struck  the  fet- 
ters of  feudalism  from  the  human  race,  and  gave 
free  play  to  the  intelligence,  energy,  and  initia- 
tive of  all  the  millions  of  human  beings.  The 
development  of  the  steam-engine,  of  steamship 
and  locomotive,  and  later  of  telegraph,  tel- 
ephone, and  electric  power,  forged  the  tools; 
the  free  and  unrestrained  competition,  which  is 
the  industrial  expression  of  the  individualistic 
age,  gave  the  driving  force  which  led  to  the 
great  industrial  development  of  the  last  cen- 
tury. The  result  was  that  the  last  century  has 
seen  a  greater  progress  of  mankind  than  all  the 
previous  centuries  together. 

Competition  thus  became  the  industrial  ex- 
pression of  the  individualistic  era. 

19 


AMERICA  AND  THE  NEW  EPOCH 

Under  the  competitive  system  of  industrial 
organization — "capitalistic  society,"  as  it  is 
often  called — the  means  of  production,  trans- 
portation, and  distribution  of  commodities  have 
increased  enormously  and  apparently  without 
limit. 

As  the  result,  the  standard  of  living  of  man- 
kind steadily  rose,  and  things  which  in  one  gen- 
eration were  a  luxury  available  only  to  a  few, 
became  a  common  necessity  to  the  next  gener- 
ation. 

The  increased  productivity  cheapened  the 
cost  and  so  stimulated  consumption,  and  this 
again  increased  the  production,  led  to  further 
improvements,  cheapening  the  cost  and  increas- 
ing the  consumption.  The  competitive  age 
thus  has  given  to  the  masses  of  people  a  stand- 
ard of  living  superior  to  that  of  the  privileged 
classes  in  the  feudal  age. 

But  in  spite  of  the  enormous  and  very  often 
artificially  stimulated  increase  of  consmnption 
of  commodities,  a  check  had  to  come  in  the 
wild  race  between  increasing  production  and  in- 
creasing consumption.  The  ability  of  con- 
sumption, and  with  it  the  demand  for  the 
commodities  of  industrial  production,  is  not 
capable  of   unlimited   increase,   and  therefore 

20 


FROM  COMPETITION  TO  CO-OPERATION 

finally  a  time  came  when  the  means  of  produc- 
tion of  commodities  increased  beyond  the 
demand  possible  under  existing  conditions. 

England  was  the  first  nation  to  benefit  from 
the  competitive  organization  of  society.  While 
all  Europe  was  plunged  into  the  Napoleonic 
wars,  England,  protected  by  the  ocean,  organ- 
ized its  trade  and  industries.  Therefore  Eng- 
land was  the  first  nation  in  which  the  means 
of  production  developed  beyond  the  possible 
demand.  Temporarily  the  problem  was  solved 
by  supplying  the  markets  of  the  world,  and 
thereby  taking  care  of  the  rapidly  increasing 
excess  of  its  producing  facilities  over  its  own 
demand.  Thus  England  became  a  great  ex- 
porting nation,  and  by  the  profits  of  its  foreign 
trade  laid  the  foundation  of  its  later  financial 
power. 

But  gradually  the  other  nations  caught  up. 
So  Germany,  once — still  within  the  memory  of 
the  present  generation — an  industrial  depend- 
ency of  England,  became  independent,  then 
became  England's  competitor  in  the  markets  of 
the  world,  and  to-day  China  is  about  the  only 
large  remaining  outlet  for  the  over-production 
of  the  industrial  nations.  Therefore  the  great 
interest  of  the  nations  in  the  "opening  up  of 

21 


AMETUCIA  AND  THE  NEW  EPOCH 

China,"  and  their  mad  scramble  to  get  control 
of  its  markets. 

America  is  in  a  peculiar  and  very  fortunate 
position.  As  a  new  country  with  a  vast  capital 
in  natural  resources,  and  with  a  relatively  low 
population  density,  but  a  rapidly  growing  pop- 
ulation, it  offered  great  opportunities  of  devel- 
opment. That  part  of  the  United  States  which 
is  least  favored  by  nature,  but  which  was  settled 
first — the  New  England  States — felt  the  pinch 
of  the  industrial  problem  already  in  the  middle 
of  the  nineteenth  century,  but  the  problem  was 
solved,  at  least  temporarily,  by  forcibly  ex- 
cluding foreign  competition  from  the  United 
States,  and  so  reserving  the  markets  of  the 
South  and  of  the  West  to  the  industrial  New 
England  States.  This  was  the  issue  on  which 
the  Civil  War  was  fought;  the  abolishment  of 
slavery  was  merely  an  incident  of  this  economic 
issue.  The  Civil  War  thus  was  an  economic 
war,  just  as  every  great  war  has  been;  it  con- 
solidated the  United  States  industrially  as  one 
nation,  while  the  Revolutionary  War  had  made 
it  politically  one  nation. 

The  great  industrial  development  of  our 
country  in  the  last  generation  was  the  result. 

Finally  even  in  the  United  States  the  rapidly 

22 


FROM  COMPETITION  TO  CO-OPERATION 

increasing  means  of  production  have  crept  up 
to  and  beyond  the  means  of  possible  consump- 
tion. This  occurred  later  than  in  any  other 
civilized  nation,  for  various  reasons.  The  rap- 
idlj'  increasing  population  meant  an  abnormal 
increase  of  demand.  The  development  of  the 
vast  possibilities  of  the  country  in  farming, 
mining,  transportation,  etc.,  absorbed  a  vast 
amount  of  industrial  products,  and  offered  em- 
ployment and  means  of  living  to  millions,  and 
this  increase  of  population  again  increased  the 
possible  consmnption.  The  vast  natural  re- 
sources made  it  possible  to  use  what  we  had 
not  produced,  and  thereby  led  to  an  average 
consumption,  an  average  standard  of  living, 
beyond  that  of  any  other  country.  This  is 
a  rather  serious  problem,  as  it  means  that  our 
nation  has  largely  been  living  on  its  capital  and 
not  on  its  income,  and  thereby  acquired  habits 
of  the  spendthrift.  But  our  natural  resources 
are  greatly  depleted,  and  when  it  will  not  be 
possible  any  more  to  cut  down  for  lumber  the 
trees  which  we  have  not  planted,  to  take  out 
from  the  soil  as  crops  what  we  have  not  put  in, 
but  when  every  tree  which  we  cut  down  will 
have  to  be  planted  and  raised,  as  in  other 
countries,  when  we  shall  have  to  put  into  the 

23 


AMERICA  AND  THE  NEW  EPOCH 

soil  as  fertilizer  whatever  we  take  out  as  crops, 
then  under  the  present  industrial  organization 
of  our  country  we  will  not  be  able  to  maintain 
our  present  standard  of  living. 

All  these  features  together  have  created  an 
abnormal  increase  of  consuming  capacity  of  our 
nation,  and  so  it  was  only  in  the  last  decades 
that  the  means  of  possible  production  have  be- 
gun to  increase  beyond  the  possible  demand  for 
consumption  and  the  industrial  problem  has 
become  urgent. 

This  problem  had  not  been  expected  in  the 
early  days  of  the  competitive  system  of  society, 
and  while  to-day  most  people  throughout  the 
civilized  world  feel  that  there  is  a  hitch  some- 
where in  the  working  of  free  competition,  most 
people  do  not  yet  clearly  realize  where  and  why 
competition  failed  to  bring  about  that  stable 
balance  between  production  and  consumption 
which  was  the  orthodox  idea  of  the  economists 
of  the  past,  in  the  early  days  of  the  individualis- 
tic era,  and  which  is  still  the  conception  of  many 
of  those  who,  far  from  the  work  of  the  world 
under  the  student  lamp  and  in  the  chairs  of  our 
universities,  ponder  over  the  problems  of  the 
nation. 

The  conception  of  competition  as  a  benevo- 
84 


FROM  COMPETITION  TO  CO-OPERATION 

lent  force  in  the  industrial  progress  was  based 
upon  the  theory  that  by  competition  between 
the  producers  prices  would  be  lowered  down  to 
near  the  cost  of  production,  stopping  just  as 
much  above  the  cost  of  production  as  is  neces- 
sary to  give  a  fair  profit. 

The  fallacy  involved  in  this  reasoning  is  the 
neglect  of  the  economic  law  that  it  is  more 
economical  to  operate  a  business  or  a  factory 
at  a  loss  than  it  is  to  have  it  stand  idle;  be- 
cause to  have  an  industry,  a  factory,  stand 
idle,  involves  the  continuous  loss  in  fixed 
charges. 

The  cost  of  production,  whether  it  be  that  of 
a  few  quarts  of  milk  which  a  farmer  peddles 
through  a  country  town,  or  of  the  most  intri- 
cate machinery,  or  of  common  necessities,  as 
shoes,  clothing,  or  of  the  transi)ortation  and 
distribution  of  goods,  or  of  the  electric  energy 
supply  of  a  city,  always  consists  of  two  parts, 
a  fixed  cost  and  a  proportionate  cost.  The 
former  comprises  all  those  expenses  which  go 
on  whether  anything  is  produced  or  the  pro- 
duction stopped  by  lack  of  demand  for  the 
product.  The  latter  represents  that  part  of  the 
cost  which  is  proportional  to  the  amount  of 
commodity  produced.    Fixed  cost,  for  instance, 

25 


AMERICA  AND  THE  NEW  EPOCH 

is  the  interest  on  the  investment.  Whether  the 
factory  is  working  full  capacity,  or  only  part  of 
its  capacity,  or  standing  entirely  idle,  the  interest 
charges  continue  the  same.  Proportionate  cost, 
for  instance,  is  that  of  raw  materials;  if  we 
produce  twice  as  much,  twice  as  much  material 
is  needed.  If  the  production  ceases,  the  con- 
sumption of  raw  material  ceases.  Possibly,  in 
bygone  days  of  simplest  individual  production, 
the  fixed  cost  may  have  been  negligible;  if  the 
shoemaker  in  the  earliest  Colonial  days  did 
not  find  enough  work  in  making  shoes,  he  could 
probably  do  some  harness-making,  or  some 
carpenter  work  in  his  shop,  and  so  earn  his 
living.  But  if  to-day  the  demand  W  shoes 
falls  off  and  the  shoe-factory  has  to  shut  down, 
the  interest  on  the  investment  represented  by 
the  factory  goes  on  just  the  same;  the  depre- 
ciation of  machinery,  of  buildings,  etc.,  con- 
tinues; some  maintenance  is  still  required — 
that  is,  a  considerable  part  of  the  cost  of  pro- 
duction continues  even  if  the  production  has 
stopped.  This  part  of  the  cost  of  production, 
which  is  called  the  fixed  cost,  as  it  is  independ- 
ent of  the  amount  of  the  product,  and  which 
continues  even  if  there  is  no  production,  varies 
from  a  few  per  cent,  in  some  simple  opera- 

2G 


FROM  COMPETITION  TO  CO-OPERATION 

tions  up  to  over  90  per  cent,  of  the  total  cost 
of  the  product,  in  some  hydro-electric  power 
plants. 

The  result  is  that  unlimited  competition,  as 
soon  as  the  ability  of  producing  has  increased 
beyond  the  available  demand  for  the  product, 
forces  the  price  down  not  merely  to  the  value 
giving  a  fair  profit  above  the  cost  of  production, 
as  dreamt  by  the  early  economists,  but  the 
dropping  of  price  stops  only  there,  where  it 
would  become  cheaper  to  stop  production  than 
to  produce  at  a  loss — that  is,  where  the  loss  in 
production  exceeds  the  loss  of  having  the  in- 
dustry stand  idle:  the  limitation  of  price,  forced 
by  competition,  is  below  the  cost  of  produc- 

tion, a  .  I  as  the  result  the  level  reached  by  free 
industrial  competition  is  an  unstable  condition, 
a  condition  of  production  at  a  loss,  which  can 
exist  and  continue  for  a  limited  time  only,  but 
finally  ends  in  the  bankruptcy  of  many  of  the 
producers,  in  serious  losses  to  others,  and  in 
wide-spread  destruction  of  values. 

Consider  as  an  illustration  the  case  of  a  very 
large  industrial  power  plant:  for  every  $100 
invested  in  the  plant  the  annual  income  may 
be  $50.  These  $50  are  disposed  of  as  fol- 
lows; 

27 


AMERICA  AND  THE  NEW  EPOCH 

Labor $  9 

Fuel 6 

Other  materials  and  supplies 11 

Taxes 3 

Depreciation 6 

Interest 5 

Dividends 6 

Surplus 4 

Of  these  expenses,  all  the  fuel,  most  of  the 
labor  and  materials,  and  a  part  of  the  depre- 
ciation are  proportionate  costs — that  is,  costs 
which  vary  with  the  amount  of  commodity 
produced,  and  would,  therefore,  vanish  if,  due 
to  competition,  the  production  should  cease. 

Taxes  and  interest,  however,  most  of  the 
depreciation,  and  a  small  part  of  labor  and  of 
materials  are  fixed  costs — that  is,  continue  re- 
gardless whether  the  plant  is  operating  full 
capacity,  or  at  reduced  output,  or  entirely 
standing  idle.  (Dividends  should  in  reality  be 
included  in  fixed  cost,  as  without  dividends  no 
capital  could  be  induced  to  invest,  and  the 
plant  could,  therefore,  not  exist.  They  will, 
however,  be  omitted,  as  temporarily,  for  some 
years,  an  industrial  organization  can  continue 
without  dividends.  Surplus  represents  the 
amount  of  income  set  aside  for  times  when  the 
income  falls  below  the  cost  of  production — that 
is,  is  an  insurance  against  temporary  losses.) 

28 


FROM  COMPETITION  TO  CO-OPERATION 

The  distribution  of  proportionate  cost  and  of 
fixed  cost  per  $100  capital  invested  in  the 
plant  thus  would  be: 

At  an  annual  income  of  $50 : 

Proportionate  Fixed 

Cost  Cost 

Labor $  8  $1 

Fuel G 

Other  materials 10  1 

Taxes 3 

Depreciation 2  4 

Literest 5 

Total $20  $14 

Gram!  total. . .  $40 

leaving  $10  for  dividends  and  surplus. 

If  the  production  were  entirely  stopped,  the 
$26  proportionate  cost,  per  $100  invested, 
would  be  saved,  but  the  $14  fixed  cost,  per  $100 
of  capital  invested,  would  continue,  as  a  loss  or 
impairment  of  capital,  of  14  per  cent,  per  year, 
and  thus,  in  ^Y'  =  '^  years,  the  entire  capital 
would  be  wiped  out  by  the  losses,  and  lost. 

Thus  it  is  economically  not  possible  to  shut 
down  the  plant  and  wait  until  there  is  again  a 
demand  for  the  commodity. 

Suppose  now,  to  maintain  the  plant  in  oper- 
ation, the  price  of  the  commodity  were  reduced 
from  $50  to  $33. 

At  $40  total  cost  of  production,  this  would 

29 


AMERICA  AND  THE  NEW  EPOCH 

give  an  annual  loss  of  $40  — $33  =  $7,  or  7  per 
cent,  of  the  invested  capital,  thus  would  wipe 
out  the  capital  of  the  company  in  -7-  =  14 
years,  and  be  destructive.  Nevertheless,  rather 
than  close  down  entirely  and  incur  the  annual 
loss  of  14  per  cent,  of  the  invested  capital,  it 
would  be  preferable,  when  forced  by  competi- 
tion, to  lower  the  price  of  the  commodity  below 
cost,  to  $33,  as  the  loss  thereby  incurred,  of 
7  per  cent.,  is  less  than  the  loss  in  standing  idle. 
For  the  different  prices  of  the  conii  .odity, 
per  $100  of  investment,  the  profits  and  the 
losses,  and  the  time  until  the  capital  invested 
in  the  plant  is  wiped  out  by  the  losses,  would 
then  be: 


rice  of  Commodity; 

Per  $100  of 
Invested  Capital 

Dividends  and 

Surplus 

Per  Cent. 

Loss 
Per  Cent. 

Capital 

Wiped  Out 

In 

$50 

10 

45 

5 

.  . 

40 

0 

0 

35 

5 

20  years 

30 

10 

10       " 

26 

14 

7       " 

25 

15 

0.7  " 

20 

20 

5 

Shut  down: 

14 

7       " 

Thus,  when  forced  by  unrestricted  competi- 
tion it  would  be  more  economical  to  operate, 
selling  the  product  below  cost,  at  any  loss  up  to 


30 


IROM  COMPETITION  TO   CO-OPERATION 

14  per  cent. — although  this  would  inevitablj'^  ruin 
the  company — rather  than  close  down  and  ac- 
cept the  still  greater  toss  of  the  entire  fixed  cost. 

But  operation  at  a  loss,  though  not  so  rapidly 
destructive  as  shut  down,  still  means  financial 
disaster,  and  when  forced  by  unrestricted  com- 
petition thus  ends  in  ruin. 

We  have  seen,  and  still  see  all  around  us, 
the  destruction  of  producers  wrought  by  com- 
petition, the  waste  of  intellectual  and  physical 
values  incident  thereto,  and  the  resultant  dam- 
age to  the  industry,  and  with  it  to  society. 

The  failure  of  the  industrial  system  of  com- 
petition to  come  up  to  the  expectations  of  the 
early  days  thus  was  due  to  the  failure  of  recog- 
nizing in  the  theory  of  competition  the  bearing 
of  the  fixed  cost  of  production  on  the  level 
reached  by  competitive  production. 

The  natural  result  of  this  industrial  law  is 
that  free  competition  cannot  continue,  but 
that  intelligent  people  in  charge  of  the  industries 
all  over  the  world — whether  they  be  the  milk- 
men or  ice-dealers  supplying  a  small  country 
town,  or  the  presidents  of  rolling-mills  or  rail- 
roads— have  to  come  together  and  stop  unlim- 
ited competition  before  the  level  of  destruction 

is  reached. 

3  31 


AMERICA  AND  THE  NEW  EPOCH 

This  led  to  co-operation  as  the  industrial  force 
which  is  taking  the  place  of  competition. 

Many  people  in  our  country,  in  all  walks  of 
life,  economists  and  statesmen,  even,  do  not  yet 
realize  the  working  of  this  economic  law  and 
its  consequence. 

They  see  competition  vanishing  before  co- 
operation or  consolidation,  and,  still  dreaming 
of  competition  as  the  beneficent  force  which  it 
was  in  the  early  days  of  industrial  develop- 
ment, endeavor  to  restore  competition.  There- 
fore, you  see  all  the  attempts  to  resurrect  to 
life  a  dead  issue  by  legal  enactments,  by  trying 
to  break  up  the  cori^orations,  enforcing  com- 
petition by  law,  etc.  All  this  is  contrary  to  the 
economic  laws  underlying  industrial  produc- 
tion, and  is  therefore  helpless,  and  must  remain 
a  failure.  No  legal  enactment  can  change  this, 
but  the  laws  of  nature  are  above  man-made 
laws,  and  political  law  violating  the  laws  of 
nature  is  void.  You  may  destroy  the  indus- 
tries by  legal  interference,  and  plunge  the  na- 
tion in  disaster  and  chaos,  but  you  cannot  re- 
store competition.  It  is  dead,  just  as  dead  as 
the  feudalism  of  the  Middle  Ages.  Co-operation 
is  taking  its  place. 

This,  here  in  America,  many  of  our  leaders 

32 


FROM  COMPETITION  TO  CO-OPERATION 

of  thought  in  the  theoretical  field,  in  our  uni- 
versities, in  our  political  offices,  have  not  real- 
ized, neither  do  the  mass  of  the  people  realize 
it  yet,  and  consequently  they  mistake  the  effect 
for  the  cause.  They  imagine  industrial  consoli- 
dation is  killing  competition,  and  try  to  stop 
consolidation  by  breaking  up  the  corporations, 
while  in  reality  the  death  of  competition  as  a 
beneficent  industrial  force  is  the  cause  of  con- 
solidation, has  led  to  the  corporation  as  the 
only  means  of  industrial  production.  Thus,  not 
the  "trusts"  are  killing  competition,  but  the 
failure  of  competition  is  the  cause  of  industrial 
consolidation,  of  the  corporations. 

Thus,  wherever  outside  forces  did  not  inter- 
fere, the  inevitable,  because  natural,  industrial 
development  in  the  individualistic  era  is,  from 
small  production  by  numerous  independent  in- 
dividual producers — in  the  days  before  Lincoln, 
in  our  country — to  a  smaller  number  of  larger 
industrial  establishments  still  personally  owned 
and  managed.  Then  by  consolidation  of  the 
stronger,  and  elimination  of  the  weaker  ones, 
came  the  formation  of  industrial  corpora- 
tions, each  representing  the  combination  of 
numerous  individual  producers.  In  the  begin- 
ning these  corporations  were  still  largely  domi- 

33 


AMERICA  AND  THE  NEW  EPOCH 

nated  by  individuals,  their  organizers,  but 
gradually  the  personal  element  stepped  into  the 
background  and  vanished,  the  number  of  cor- 
porations decreased  and  their  size  increased 
until  finally  the  entire  industry  was  organized 
into  a  moderate  number  of  very  large  corpora- 
tions, often  still  in  fierce  and  destructive  com- 
petition with  one  another.  Of  necessity  then 
followed  the  formation  of  a  co-operative  ar- 
rangement between  the  corporations  dominating 
the  industry,  for  self-preservation  against  the 
general  destruction  inevitable  by  unrestrained 
competition.  Sometimes  it  was  the  formation 
of  a  single  corporation  controlling  the  entire 
industry;  more  frequently  one  large  corpora- 
tion controlling  a  large  part  of  the  industry,  and 
a  number  of  smaller  corporations,  which,  while 
financially  and  administratively  independent, 
by  tacit  understanding  accepted  the  prices  fixed 
by  the  dominating  corporation.  Usually,  how- 
ever, with  a  number  of  large  corporations  in  the 
field,  the  destructive  competition  was  elimi- 
nated by  agreements  limiting  production  to 
that  conforming  with  the  demand,  and  agree- 
ing upon  prices  maintaining  a  fair  margin 
of  profit.  Such  CO  -  operative  agreements 
varied  in  nature  from  practical  consolidation 


FROM  COMPETITION  TO  CO-OrERATION 

into  a  trust  or  syndicate  to  a  mere  gentle- 
man's agreement. 

Such  a  co-operative  agreement  on  prices  and 
production  is  necessary  if  the  industry  shall  sur- 
vive and  the  nation  escape  industrial  disaster, 
and  in  countries  in  which  an  intelligent  central- 
ized government  looked  after  the  welfare  of  the 
nation,  as  in  Germany,  such  elimination  of 
competition  and  consolidation  for  the  common 
good  has  been  encouraged  and  assisted,  and 
often  enforced  by  the  Government,  while  in 
countries  in  which  the  Government  is  entirely 
under  the  control  of  capitalism  and  has  no  in- 
dependent power,  as  in  England,  the  Govern- 
ment has  stood  aside  and  allowed  the  corpora- 
tions to  organize  more  or  less  efficiently^  Only 
in  our  country  has  the  national  Government, 
impelled  by  the  remnants  of  the  small  individ- 
ual producers,  the  still  powerful  middle-class 
interests,  attempted  to  outlaw  the  co-operation 
of  corporations  and  by  political  laws  to  legis- 
late against  economic  laws,  without  realizing 
that  economic  laws  are  laws  of  nature,  are  inev- 
itable, and  their  defiance,  whether  by  an  indi- 
vidual or  by  a  nation,  means  self-destruction.' 

There  was,  however,  some  excuse  for  the  op- 
position against  the  co-operation  of  the  corpo- 

35 


AxMERICA  AND  THE  NEW  EPOCH 

rations  controlling  the  industry,  in  tlie  danger 
to  the  public  welfare  which  the  power  of  such 
co-operative  organization  may  involve  in  a  na- 
tion like  ours,  which  has  no  stable,  permanent, 
and  therefore  responsible  Government,  but  in 
which  the  Government  is  still  largely  dominated 
by  the  principle  of  rotation  in  office  for  the 
distribution  of  spoils.  In  the  control  of  an 
industry  by  the  co-operation  of  the  industrial 
corporations  in  controlling  production  and 
prices,  it  is  possible  to  limit  production  below 
the  demand,  and  so  "corner"  the  product,  and 
to  raise  the  prices  beyond  those  giving  a  fair 
return  on  the  legitimate  investment  of  capi- 
tal. Then  the  combination  becomes  a  national 
menace,  especially  where  foreign  competition 
does  not  act  as  a  check,  as  in  free-trade  England. 
Sometimes  such  ex[)loilation  of  the  public  may 
be  premeditated,  but  more  often  it  is  the  result 
of  the  inefficiency  of  production,  and  the  latter 
is  the  more  serious  side  of  the  problem,  as  it  is 
more  difficult  to  deal  with  than  a  mere  attempt 
of  extortion. 

The  modern  corporation,  which  is  the  present 
expression  of  the  co-operative  system  of  indus- 
trial organization,  is  such  a  relatively  new  de- 
velopment that  its  structure  is  still  crude  and 

30 


FROM   COMPETITION  TO  CO-OPERATION 

defective  in  many  ways.  Its  activities  are  four- 
fold— financial,  administrative,  technical,  and 
social.  As  capital  is  the  foundation  of  our 
present  industrial  system,  financial  consolida- 
tion is  the  first  step  of  industrial  co-operation. 
Administrative  consolidation  and  reorganiza- 
tion must  follow,  and  then  technical  or  engi- 
neering reorganization,  to  reap  the  benefit  of 
industrial  co-operation.  The  technical  side  of 
the  corporation  is  the  purpose  of  its  existence; 
manufacture,  transportation,  etc.,  are  technical 
or  engineering  pi'oblems,  and  the  administra- 
tive and  financial  activities,  therefore,  merely 
means  to  accomplish  the  legitimate  object  of 
the  corporation — production.  Therefore,  where 
the  progress  stops  with  administrative  consoli- 
dation and  does  not  reach  engineering  re- 
organization for  the  higher  efficiency  made 
possible  thereby,  the  results  are  disappointing, 
and  dissatisfaction  of  the  public  follows  and 
sooner  or  later  makes  itself  felt  by  hostile  atti- 
tude toward  the  corporation.  Where  the  work 
has  stopped  with  the  financial  consolidation 
and  does  not  reach  administrative  reorganiza- 
tion, waste  and  extravagance  and  financial 
disaster  are  liable  to  result. 

It  cannot  be  denied  that  a  considerable  part 

37 


AMERICA  AND  THE  NEW  EPOCH 

of  the  public  hostility  against  corporations  re- 
sulted from  the  increase  of  the  price  of  the  com- 
modity controlled  by  some  corporations.  The 
failure  of  proceeding  beyond  financial  consoli- 
dation, the  failure  of  efficient  administrative, 
and  especially  technical  reorganization,  re- 
sulted in  not  realizing  the  decreased  cost  of 
production  which  the  economy  of  mass  pro- 
duction should  bring  about,  and  the  need  of 
paying  the  cost  of  consolidation  then  led  to  an 
increase  of  the  price  of  the  commodity,  instead 
of  the  decrease  which  should  be  the  result  of 
co-operative  production,  and  the  absence  of 
competition  then  allowed  such  a  situation  to 
persist  longer  than  is  safe.  At  the  same  time,  it 
must  be  realized  that  the  corporations  are  the 
creations  of  man,  that  the  industrial  develop- 
ment of  our  country  has  been  so  enormously 
rapid  and  the  number  of  men  capable  of  direct- 
ing it  safely  is  relatively  so  insufiicient  that 
many  things  which  should  be  done,  which  the 
corporation  leaders  realize  as  desirable  and 
necessary  and  wish  to  have  done,  remain  undone 
for  a  long  time,  because  men  capable  of  doing 
them  cannot  be  found. 

The  inevitable  defects  of  the  new  industrial 
growth  led  to  the  demand  for  supervision  and 

38 


FROM  COMPETITION  TO  CO-OPERATION 

control  of  corporations,  and  siicli  supervision 
and  control  thus  has  been  established  by  legisla- 
tive action  of  municipalities,  states,  and  nation, 
in  the  various  commissions,  from  the  Interstate 
Commerce  Commission  of  tlie  Federal  Govern- 
ment down  to  municipal  commissions  dealing 
with  local  industries.  The  unfortunate  feature 
is  that  the  men  who  created  these  industrial 
commissions,  and  who  serve  in  them,  very  often 
do  not  understand  the  economic  position  of  the 
corporations  as  industry's  most  efficient  tool, 
do  not  realize  that  we  are  in  the  transition  from 
the  competitive  to  the  co-operative  system  of 
industry,  and  much  of  the  legislation  thus  is 
inquisitorial  rather  than  constructive,  and  as 
the  result  it  is  questionable  whether  thus  far 
the  legislation  regarding  corporations  has  not 
done  more  harm  than  good  for  the  nation. 

The  structural  elements  of  the  industrial  cor- 
porations are  human  beings,  and  when  replacing 
their  separate  industrial  efforts  as  individual 
producers  by  their  co-operative  work  in  the 
corporate  organization,  their  individual  efforts 
for  their  own  well-being  also  require  consolida- 
tion into  an  organization  for  their  common  wel- 
fare. And,  after  all,  while  the  purpose  of  the 
corpolration  is  industrial  production,  the  pur- 

39 


AMERICA  AND  THE  NEW  EPOCH 

pose  of  industrial  production  is  the  welfare  of 
the  members  of  society,  the  producers,  so  that 
the  final  purpose  of  all  is  the  welfare  of  societj^  \ 

The  realization  of  "social  work"  as  one  of 
the  essential  activities  of  the  corporation  has 
come  last.  It  is  just  being  approached  by 
many  corporations.  Sometimes  it  is  the  result 
of  the  pressure  exerted  by  independent  and  often 
hostile  employees'  associations — labor  unions. 
Or  where  the  corporation  has  succeeded  in 
suppressing  organized  action  of  its  employees, 
by  spontaneous  outbreaks — syndicalism.  But 
whatever  the  reasons  may  be  for  entering  social 
work,  it  must  be  realized  that  it  is  not  a  "char- 
ity," a  "social  duty,"  but  is  just  as  integral  a 
part  of  the  corporation  as  the  financial  or  the 
administrative  activities. 

The  most  serious  defect  of  the  social  activ- 
ities of  the  corporations  to-day — welfare  and  ed- 
ucation— is  the  lack  of  men  capable  to  direct 
the  work.  To  organize  and  direct  this  imi)or- 
tant  activitj'^  of  the  modern  corporation  requires 
men  who  have  to  a  high  degree  the  social  sense, 
and  at  the  same  time  are  thoroughly  familiar 
with  the  other  activities  of  the  company,  finan- 
cial, administrative,  and  technical,  so  as  to  co- 
ordinate   their    social    work    with    the    other 

40 


FROM  COMPETITION  TO  COOPERATION 

activities  of  the  corporation.  Such  men  are 
few,  and  herein  hes  the  greatest  limitation  of 
the  rapid  advance  of  the  corporate  organiza- 
tion of  society,  which  is  necessary  for  its 
economic  efficiency. 

The  question  is  often  asked  by  the  extreme 
individuah'st.  With  industrial  competition  dead 
and  the  national — or  international — corpora- 
tion taking  the  i)lace  of  the  numerous  independ- 
ent and  competing  producers,  will  not  industrial 
progress  stop,  and  stagnation — that  is,  retro- 
gression— result  from  the  suppression  of  indi- 
vidual enterprise,  the  absence  of  the  rivalry 
between  competitors,  which  brings  out  their 
best  efforts,  their  initiative  and  ambition? 

Industrial  competition  of  everybody  for 
himself  and  against  everybody  else — and  the 
devil  take  the  hindmost — has  failed  and  is  dis- 
appearing, is,  indeed,  practically  dead,  but  there 
is  growing  up  in  the  industrial  organizations  a 
competition  to  further  the  common  end,  the 
welfare  and  advance  of  the  organization,  a 
rivalry,  who  can  accomplish  most  for  the  benefit 
of  the  corporation,  and  the  reward  is  in  power, 
in  reputation,  and  also  financially.  It  is  this 
competition  of  co-operation  which  the  change  of 
the  industrial  system  from  competition  to  co- 

41 


AMERICA  AND  THE  NEW  EPOCH 

operation  is  introducing  into  the  industries;  the 
same  competition  of  co-operation  as  exists  in  sci- 
entific circles  in  the  universities  of  the  world,  the 
same  as  has  made  armies  victorious  and  nations 
powerful  and,  when  failing  by  the  encroachment 
of  class  privilege  and  favoritism,  has  defeated 
armies  and  destroyed  nations. 

Success  is  often  measured  by  the  accumula- 
tion of  wealth;  but  does  anybody  really  im- 
agine that  to  the  multi-millionaires,  to  the  great 
financiers  of  to-day,  the  accumulation  of  money 
far  beyond  any  possible  personal  use  is  the  in- 
ducement? Is  it  not  rather  the  power  which 
the  money  represents,  and  does  not  the  power 
of  great  scientific  reputation,  of  statesmanship, 
etc.,  attract  equally  great  minds?  If  we  speak 
of  really  great  men — men  whose  greatness 
everybody  recognizes — a  Lincoln,  Washington, 
Franklin — does  anybody  know  or  ask  how  rich 
they  were,  how  "successful"  they  were  from 
the  point  of  view  of  measuring  success  by 
wealth?  So  ambition,  rivalry,  the  success  of 
power  and  accomplishment  remain,  even  if 
money  would  cease  to  be  the  goal.  However, 
even  to-day  the  chances  of  financial  success  in 
unrestrained  industrial  competition  are  rather 
remote,  and  in  the  big  corporation  a  far  better 

42 


FROM  COMPETITION  TO  CO-OPERATION 

chance  of  success  is  afforded  than  in  individual 
production,  even  from  the  financial  point  of 
view. 

Thus  the  nightmare  that  the  elimination  of 
industrial  competition  and  the  development  of 
the  vast  industrial  corporation  would  stifle 
progress  by  destroying  ambition  requires  no 
serious  consideration;  the  reverse  is  the  case. 
We  still  hear  a  lot  of  talk  on  the  necessity  of 
individual  enterprise  for  progress,  but  even  to- 
day and  for  some  time  back,  when  any  really 
great  work  was  considered,  individual  enter- 
prise usually  failed,  and  the  corporation,  either 
the  private  corporation,  or  the  public  corpo- 
ration— municipality.  State,  or  nation — had  to 
step  in. 


IV 

THE  INDIVIDUALISTIC  ERA!  THE  OTHER  SIDE 

POLITICAL  and  industrial  freedom  unfet- 
tered the  ambition,  the  initiative,  the  cre- 
ative, and  inventive  abihty  of  all  the  human 
race  and  so  founded  our  modern  industrial  civ- 
ilization on  the  basis  of  individualism. 

But  differently  expressed,  this  foundation  of 
our  civilization  means,  "Everybody  for  himself, 
and  the  devil  take  the  hindmost."  What  then 
if  the  hindmost  does  not  care  to  be  taken?  And 
organized  mediocrity  is  more  powerful  than 
individualistic  ability. 

For  a  long  time  this  issue  did  not  arise;  the 
opportunities  opened  up  by  the  destruction  of 
feudal  i)rivilege  were  so  vast  that  few  indeed 
were  those  who  did  not  find  their  social  and 
industrial  position  materially  better  than  in 
previous  ages.  In  the  small  individualistic  pro- 
duction of  the  first  half-century  of  capitalism 

everybody    with    some    initiative   and    ability 

44 


THE  OTHER  SIDE 

found  opportunity  to  make  himself  industrially 
independent  and  moderately  prosperous — as 
pros})erity  was  considered  in  these,  the  golden 
days  of  individualism.  But  the  means  of  pro- 
duction rai)idly  increased,  competition  between 
producers  became  more  severe  and  destructive, 
the  smaller  producer  had  to  make  room  for  the 
larger,  and  the  chances  of  the  individual  em- 
ployee to  rise  into  the  ranges  of  the  employers 
became  less  and  less,  and  so  again  classes  de- 
veloped, a  smaller  employer's  class  and  a  larger 
class  of  employees. 

But  while  under  feudalism  men  were  fairly 
well  satisfied  within  their  class  as  long  as  they 
were  justly  and  fairly  treated  in  accordance 
with  their  position  in  society,  it  was  not  so  in 
capitalistic  society.  A  change  had  occurred  in 
man  and  that  change  was  education.  The  power 
which  had  brought  about  this  change  was  the 
steam-engine.  Through  it  man  graduated  from 
laborer  to  machine-tender.  Before  the  days  of 
the  steam-engine,  man,  assisted  by  animals, 
supplied  the  power  wliich  society  demanded  in 
raising  and  moving  things,  on  farms,  and  in 
industries.  The  steam-engine  relieved  man  of 
mechanical  power,  supplying  it  a  hundred-  and 
a  thousand-fold,  and  man  became  the  operator, 

15 


AMERICA  AND  THE  NEW  ^ EPOCH 

the  director,  and  the  tender  of  the  machine.  But 
a  higher  inteUigence  and  higher  knowledge  is  re- 
quired to  direct  the  mechanical  work  of  the 
machine  than  is  required  in  direct  labor,  and 
thus  the  steam-engine,  while  increasing  the 
power  of  man  a  hundred-  and  a  thousand-fold, 
made  education  a  necessary  requirement  of  his 
industrial  usefulness. 

In  the  feudal  age  education  was  unnecessary 
for  the  efficiency  of  the  serf's  labor,  and  was  ob- 
jectionable because  making  him  dissatisfied  with 
his  lot,  and  all  that  was  necessary  was  a  little 
religion  to  hold  out  the  hope  of  reward  in 
heaven  for  his  earthly'  toil.  ~But  capitalism  re- 
quired some  education  for  the  efficiency  of  the 
workers,  and  the  industrial  development  of  a 
country  is  closely  measured  by  the  eflBciency  of 
its  public  school  system.  Thus,  even  in  Russia, 
where  an  autocratic  government  opposes  the 
education  of  the  masses,  industrial  corpora- 
tions maintain  schools  for  their  employees. 

But  education,  however  limited,  meant  some 
reasoning  power,  and  very  soon  the  question 
was  asked  why  the  unsuccessful  majority  should 
not  share  in  the  good  things  of  life  appropriated 
by  the  minority,  and  the  answer  was — organi- 
zation.   But  there  could  be  no  force  behind  such 

4G 


THE  OTHER  SIDE 

organization  so  long  as  it  appeared  to  the  in- 
dividual employee  a  shorter  and  more  promis- 
ing way  to  rise  personally  into  the  employer's 
class,  and  then  share  in  the  exploitation  of  his 
former  co-workers. 

Just  as  under  feudalism  the  serf  had  an  op- 
portunity to  rise  into  the  ruling  class — but  the 
chances  were  very  remote — so  under  capitalism 
the  wage-earner  by  exceptional  opportunity, 
intelligence,  and  initiative  could  rise  into  the  em- 
ployer's class,  but  the  chances  became  increas- 
ingly remote,  and  such  terms  as  "wage-slavery" 
arose  to  represent  the  situation,  and  the  con- 
ception of  a  "class  consciousness"  of  the  pro- 
letarian wage-earner  found  its  expression  in 
industrial  organization  as  labor  unions,  and  po- 
litical organization  in  the  socialistic  parties, 
which  took  up  the  representation  of  the  class 
of  the  exploited,  in  opposition  and  often  in  hos- 
tility to  the  exploiting  class,  in  fighting  for  a 
greater  share  of  the  industrial  production.  It  is 
significant  that  in  countries  in  which  the  seg- 
regation into  working  class  and  ruling  class  had 
become  sharpest,  and  the  chances  to  rise  from 
class  to  class  least,  the  industrial  or  political 
organization  of  the  workers  has  become  most 
powerful,  while  in  America  the  vast  natural  re- 

4  47 


AMERICA  AND  THE  NEW  EPOCH 

sources  and  the  opportunities  of  a  new  country 
make  the  chance  to  rise  to  independence  by  no 
means  negligible  even  to-day,  and  the  organi- 
zation of  the  wage-earners  never  has  reached  an 
effective  political  stage,  "class  consciousness" 
has  not  become  the  slogan  of  a  powerful  polit- 
ical party,  such  as  it  did,  for  instance,  in  Ger- 
many, already  a  generation  ago. 
,_JWith  the  further  development  of  industrial 
capitalism  gradually  the  corporation  took  the 
place  of  the  large  individual  employer,  and  the 
"employer's  class"  steadily  dwindled  down. 
First,  individual  personality  still  dominated  the 
corporation:  the  "Harriman"  roads,  the  "Van- 
derbilt"  interests,  etc.  But  with  the  death  of 
the  men  who  organized  the  corporations,  their 
management  became  impersonal,  and  so  we 
find  to-day,  at  least  in  those  industries  in  which 
the  development  has  progressed  furthest,  no 
more  a  class  of  employers  and  a  class  of  em- 
ployees, but  impersonal  capital  is  the  employer, 
and  all  the  human  beings,  from  the  president  to 
the  laborer,  are  employees.  With  the  wide 
range  of  activities  of  the  employees  of  capital, 
there  are  wide  differences  of  interest,  but  the 
sharp  dividing  line  between  the  antagonistic 
interests  of  hostile  classes  is  decreasing,  and 

48 


THE  OTHER  SIDE 

"class  consciousness"  is  beginning  to  become 
an  anachronism.  To  revive  it  as  an  antagonism 
between  salaried  officials  and  wage-earners,  or 
between  shop  and  office  force,  fails  where  many 
a  journeyman's  earnings  exceed  the  salaries  of 
the  younger  men  of  the  clerical  force,  and  the 
distinction  between  office  and  shop  is  often  lower 
pay  and  less  freedom  of  the  young  man  in  the 
office  force  than  in  the  shops.  It  is  again  sig- 
nificant how  large  a  membership  in  the  Social- 
ist party  of  America  is  represented  by  office 
men  and  by  the  middle  class,  the  small  individ- 
ual producers  and  farmers  of  the  West,  an 
element  which  hardly  comes  under  the  wage- 
earner's  conception  of  "class  consciousness," 
but  which  is  rather  more  a  survival  of  the  past 
daj^s  of  small  capitalistic  production  than  the 
beginning  of  the  realization  of  a  co-operative 
commonwealth . 

With  the  corporate  organization  of  modern 
industry  the  employer's  class  is  disappearing, 
and  impersonal  capital  becomes  the  only  em- 
ployer, and  all  people  connected  with  the  in- 
dustries become  employees.  But  impersonal 
capital  is  owned  by  persons,  a  capitalist  class, 
and  the  war  of  the  classes  would  continue  be- 
tween the  capitalist  class  and  a  class-conscious 

49 


AMERICA  AND  THE  NEW  EPOCH 

working  class.  But  who  are  the  capitalist  class? 
The  idle  rich?  r)pa)0)V  TratSe?  TTij[xaTa,  at  best, 
harmless  fools,  living  on  the  wealth  created  by 
their  fathers?  They  fill  the  newspapers  with 
foolishness  and  scandal,  they  figure  in  campaign 
speeches  "to  paint  a  moral,  to  adorn  a  tale.'* 
But  industrially,  socially,  politically  they  are  a 
negligible  factor,  they  are  no  part  of  our  na- 
tional and  industrial  life,  and  are  being  rapidly 
exterminated  by  race  suicide.  No  movement 
could  derive  its  inspiration  from  a  fight  against 
them.  Then  there  are  the  great  financiers  and 
multi-millionaires.  They  may  be  in  some  in- 
stances oppressors  and  exploiters,  may  be  a 
national  menace  and  require  to  be  fought,  but 
they  are  merely  the  managers,  the  employees  of 
their  capital,  working  just  as  any  other  em- 
ployee in  the  service  of  capital,  and  bound  by 
it  in  their  action.  Furthermore,  capital  is  scat- 
tered from  the  single  family  house  with  its  heavy 
mortgage,  of  the  workman,  or  the  few  hun- 
dred dollars  in  the  savings-bank,  to  the  em- 
ployee who  receives  from  interest  and  divi- 
dends an  appreciable  addition  to  his  salary  or 
wages,  and  finally  the  employee  whose  salary 
is  small  compared  with  his  income  from  stocks 
and  bonds.     Where,  then,  is  the  dividing  line 

50 


THE  OTHER  SIDE 

between  capitalist  and  worker,  the  line  which 
distinguishes  the  one  class  from  the  other? 
And  with  the  decreasing  returns  from  smaller 
capital  holdings,  a  class  distinction  becomes 
less  and  less  possible. 

But  all  argumentation  against  the  existence 
of  classes,  all  evidence  that  there  are  no  classes 
in  modern  individualistic  society  does  not  wipe 
out  the  fact  felt  by  all  that  there  is  a  sharp 
dividing  line  going  through  modern  society,  that 
there  is  a  large  majority  which  does  not,  and 
cannot,  look  at  things  in  the  same  way  as  the 
minority — a  minority  controlling  and  satisfied 
with  existing  society,  therefore  patriotic  in  the 
defense  of  this  society,  and  a  majority  of  workers 
who  in  sentiment  and  feeling  are  hostile  to  in- 
dividualistic society,  feel  that  society  does  not 
give  to  them  what  they  believe  themselves  en- 
titled to — however  dull  and  indistinct  this 
feeling  may  often  be. 

Over  most  of  the  workers  hangs  throughout 
all  their  life  the  fear  of  unemployment,  the  fear 
of  sickness,  the  fear  of  old  age.  No  matter  how 
well  paid  their  work,  no  matter  how  much  they 
have  saved  and  placed  in  the  savings-bank  or 
invested  in  a  small  living-place,  they  never  can 
lose  the  fear  that  a  long-extended  period  of  un- 

51 


AMERICA  AND  THE  NEW  EPOCH 

employment,  a  long  sickness,  may  wipe  out 
their  small  savings  and  bring  them  face  to  face 
with  starvation ;  that  in  their  old  age,  the  poor- 
house  or  the  private  charity  of  their  relatives 
will  be  their  lot. 

It  is  these  three  great  fears  which  distinguish 
the  majority  from  the  minority  and  make  the 
former  dissatisfied  with  society.  This  is  the 
cloven  foot  of  the  individualistic  era — "the 
devil  take  the  hindmost."  Individualistic  so- 
ciety has  failed  to  guarantee  and  insure  the 
right  to  live  of  all  human  beings,  and  all  those 
who  feel  that  they  may  some  time  in  their  life 
be  caught  as  "the  hindmost"  naturally  do  not 
look  on  our  society  as  the  best  possible,  are  not 
patriotic  in  its  defense. 

Only  one  nation,  Germany,  has  eliminated 
these  three  great  fears,  has  established  the  prin- 
ciple, "the  right  to  a  living,  and  the  duty  to 
work,"  by  an  effective  unemployment  insurance, 
sickness  insurance,  and  old-age  insurance,  and 
the  result  we  see  to-day.  Whatever  views  we 
may  hold  on  the  merits  of  the  issues  of  the  war, 
there  can  be  no  denying  that  all  the  Germans, 
from  the  socialist  working-man  to  the  aristo- 
cratic nobleman,  stand  back  of  the  nation, 
while  we  have  seen  the  disinclination  of  the 

52 


THE  OTHER  SIDE 

English  worker  aguinst  voliintury  enlistment, 
his  opposition  against  fighting  for  his  nation, 
which  finally  made  conscription  necessary.  Un- 
fortunately, we  see  the  same  here  in  our  coun- 
try: in  all  the  present  patriotic  revival,  in  the 
preparedness  movement,  the  workers  and  their 
organizations  are  conspicuously  absent. 

In  this  respect  the  individualistic  era  has 
failed  to  satisfy  the  masses  of  the  people,  has 
failed  to  give  them  what  they  demand — social 
and  industrial  safety;  and  no  talk  about  un- 
desirable paternalism,  un-American  ideas,  etc., 
can  obscure  the  fact  of  the  failure. 

This  is  the  great  problem  modern  industrial 
society  has  to  face  and  to  solve.  It  is  the 
driving  force  back  of  the  "social  activities" 
which  the  modern  corporation  is  beginning  to 
recognize. 

The  success  of  industrial  capitalism  is  based 
on  mass  production  by  subdivision  of  labor. 
But  with  the  increasing  subdivision  of  work, 
the  character  of  the  work  has  changed,  and 
with  it  the  attitude  of  the  worker  toward  it: 
the  creative  element  has  gone  out  of  the  work. 
To  the  shoemaker  of  former  days  who,  from 
the  leather  as  raw  material,  made  a  complete 
pair  of  shoes,  to  the  machinist  who  collaborated 

53 


AMERICA  AND  THE  NEW  EPOCH 

in  building  a  finished  machine,  there  was  a  sat- 
isfaction in  the  creation  of  things  which  neces- 
sarily gave  them  an  interest  in  their  work. 
This  satisfaction  in  his  work  the  piece-worker 
cannot  feel,  who  makes  the  same  seam  in  every 
one  of  the  thousand  shoes  which  pass  before 
him  in  the  shoe-factory,  or  who  makes  the  same 
slash  in  every  one  of  the  carcasses  passing  be- 
fore him  in  the  slaughter-house,  or  drops  the 
same  bolt  into  the  same  kind  of  hole  in  the 
automobile  factory. 

Thus  the  work  of  the  world  has  largely 
changed  to  labor,  to  drudgery,  and  the  interest 
which  the  worker  of  former  days  found  in  his 
work  he  now  seeks  outside  of  the  working- 
hours.  As  the  result,  the  demand  for  shorter 
working-hours,  though  existing  in  former  times, 
has  become  more  insistent  now,  with  the 
changed  character  of  most  of  the  industrial 
work.  It  is  often  difficult  for  the  captain  of 
industry,  the  leader,  or  manager  to  understand 
why  the  employees  demand  the  eight-hour  work- 
ing-day, while  he  himself  is  working  twelve  or 
fourteen  hours  without  complaint:  but  let  us 
distinguish  between  creative  work  and  monot- 
onous labor,  and  the  matter  is  clearer.  Of  the 
twelve  hours  of  the  director,  two  hours  may  be 

54 


THE  OTHER  SIDE 

uninteresting  mechanical  routine,  drudgery; 
ten  hours  supervision,  administration,  direction 
of  work — in  short,  creative  activities;  and  com- 
pared with  the  piece-worker  the  balance  of 
labor  stands  two  hours  against  eight  hours.  It 
is  true,  very  few  of  the  workers  in  our  modern 
industries  who  continuouslj'^  do  the  same  thing 
over  and  over  again  would  be  willing  to  change 
to  an  occupation  where  they  have  to  use  their 
intelligence  to  a  greater  extent,  where  a  variety 
of  action  requires  reasoning  alertness.  But  this 
merely  means  that  their  intelligence  and  ability 
have  never  been  developed  sufficiently  to  appre- 
ciate creative  activity,  or  has  been  dulled  and 
depressed  at  an  early  age;  but  it  does  not  make 
the  continuous  repetition  of  piece-work  any  less 
monotonous. 

Thus  the  demand  for  a  shorter  workday, 
backed  by  the  employees'  organizations,  has 
steadily  decreased  the  hours  of  work  until  now 
we  are  approaching  the  eight-hour  workday  as 
standard,  have  reached  it  in  many  occupations, 
and  realize  that  it  is  coming  inevitably  through- 
out all  the  industrial  world.  There  can  be  no 
serious  objection  against  the  eight-hour  day, 
provided  that  it  is  universal.  The  objection  is 
the  handicap  in  industrial  competition  met  by  a 


AMERICA  AND  THE  NEW  EPOCH 

corporation  with  eight-hour  working-day  against 
a  corporation  working  nine  or  more  hours.  Thus 
if  the  efforts  toward  a  shorter  working-day  could 
be  more  equahzed,  directed  against  those  em- 
ployments in  which  the  working-hours  are  long- 
est, there  would  be  much  less  justified  opposition 
than  now. 

It  is  often  stated  that  by  the  increased  ef- 
ficiency of  work  the  same  amount  can  be  done 
in  eight  hours  as  in  nine  hours.  It  is  true  that 
the  working  efficiency  increases  with  the  short- 
ening of  the  hours,  and  the  reduction  from  nine 
hours  to  eight  hours  may  not  mean  a  decrease 
of  one-ninth  of  the  output,  but  it  means  a  very 
substantial  decrease  of  output,  sufficient  to 
prove  a  serious  handicap  in  competition  with  a 
nine-hour  day. 

Shorter  hours  means  a  decreased  plant  effi- 
ciency, and  thus  an  increase  of  the  fixed  cost 
representing  interest  and  depreciation  of  the 
factory  investment,  as  the  plant  remains  idle 
a  larger  part  of  the  time,  and  this  will  have  to 
be  met  by  operating  in  several  shifts,  utilizing 
the  plant  by  several  successive  sets  of  em- 
ployees. 

But  what  afterward?      With  the  eight-hour 

day  accomplished,  the  demand  will  not  stop, 

56 


THE   OTHER  SIDE 

but  go  toward  a  seven-hour  day,  six-hour  day, 
etc.  What  is  the  ultimate  Hmit  at  which  the 
decrease  of  the  hours  of  labor  will  have  to 
stop,  if  our  civilization  shall  continue?  Or  what 
readjustment  in  our  social  organization,  in  our 
standards  of  living,  will  be  required  to  accommo- 
date it  to  a  greatly  reduced  labor  supply? 

One  hundred  years  ago  the  average  workday 
was  ten  to  eleven  hours.  Now  it  is  eight  to 
nine  hours.  It  has  decreased  about  20  per  cent. 
The  productivity  of  work  in  these  hundred 
years,  by  the  steam-engine  and  the  infinite  num- 
ber of  inventions  and  improvements  following 
it,  has  increased  at  least  tenfold — probably 
more  nearly  twenty-  to  thirty-fold,  but  for  il- 
lustration let  us  assume  only  a  tenfold  increase. 
Thus  with  only  an  average  of  one  hour's  work 
during  the  day  we  could  now  produce  as  much 
as  we  did  in  ten  hours,  a  hundred  years  ago, 
and  could  live  in  the  same  manner,  with  the 
same  standard  of  living  which  satisfied  us  a 
hundred  years  ago,  by  working  only  one  hour 
per  day.  But  we  have  realized  on  the  increased 
productivity  of  man,  not  by  a  reduction  of  the 
hours  of  labor,  but  by  an  increase  of  consump- 
tion of  commodities.  In  short,  we  are  getting 
the  benefit  by  receiving  many  more  commod- 

57 


AMERICA  AND  THE  NEW  EPOCH 

ities — eight  to  ten  times  as  much  as  satisfied 
us  a  hundred  years  ago — but  not  by  working 
much  shorter  hours.  But  is  this  abnormal  in- 
crease of  consumption,  which  in  spite  of  the 
enormous  increase  of  productivity  requires  al- 
most the  same  working-hours,  desirable,  or  is  it 
even  desired?  Is  it  not  to  a  large  extent  arti- 
ficial and  unnatural,  fostered  by  the  producers? 
A  considerable  part  of  the  world's  work  of  to- 
day is  not  production,  but  is  advertising,  selling, 
and  all  those  activities  which  essentially  aim 
to  increase  the  production  by  stimulating  de- 
mand where  it  did  not  exist.  By  these  artificial 
means  the  consumption  has  been  increased  to 
keep  up  with  the  production  at  the  old  rate  of 
working-hours. 

Suppose  now  we  should  discontinue  consump- 
tion of  things  we  never  cared  for  until  somebody 
persuaded  us  to  their  use  and  be  satisfied  with 
only  four  to  five  times  the  commodities  with 
which  we  got  along  one  hundred  years  ago; 
this  would  give  a  four-hour  workday.  But  the 
elimination  of  all  the  work  in  making  us  use 
more  than  we  have  the  inclination  to  use,  by 
advertising,  selling,  etc.,  the  elimination  of  ob- 
vious waste  and  inefficiency,  of  duplication  of 

production,  etc.,  would  still  further  materially 

58 


THE  OTHER  SIDE 

reduce  the  work  of  the  world,  so  that,  even 
without  discounting  the  improvements  and  in- 
ventions which  are  continuously  being  made, 
we  can  see  a  world  with  a  standard  of  living 
fully  as  satisfactory  as  ours,  but  working  only 
four  hours  a  day,  only  two  hundred  days  during 
the  year — that  is,  taking  a  week  or  two  for 
recreation  at  every  holiday,  and  two  months' 
vacation  in  summer. 

This  is  far  away,  but  it  Is  no  idle  dream,  for 
we  only  need  to  look  across  the  water,  toward 
war-torn  Europe,  and  we  can  see  conditions 
which,  with  the  waste  of  war  removed,  would 
not  be  far  different  from  the  above.  While  the 
entire  world  is  called  upon  to  feed  and  supply 
the  Allies  during  this  war,  the  blockaded  Central 
Powers  feed  and  supply  themselves  and  get 
along  fairly  successfully,  as  far  as  we  can  see, 
and  what  little  trouble  there  is  is  due  to  imper- 
fections of  the  new  organization  rather.  But  if 
we  allow  for  the  millions  of  producers  who  are 
kept  in  productive  idleness  in  the  armies,  and 
supported  by  the  best  the  nation  has  in  food, 
physical  and  medical  supervision,  the  other 
millions  wasting  their  energy  in  unproductive 
work  in  making  ammunition  and  war  materi- 
als, subtract  the  mass  of  products  consumed  by 

59 


AMERICA  AND  THE  NEW  EPOCH 

these  unproductive  elements,  the  consumption 
of  the  peaceful  part  of  the  nation  certainly 
amounts  to  materially  less  than  four  hours  per 
day  productivity.  Thus,  under  better  skies, 
the  same  organization  of  production  and  elimi- 
nation of  waste  would  make  the  above  dream 
a  reality. 

And  indeed,  when  we  think  of  it,  we  see  that 
our  present  civilization  is  frightfully  inefficient 
in  man  getting  the  best  use  of  his  life. 

We  live  to  work,  a  fool  once  said,  and  millions 
of  other  fools  have  since  repeated  it.  But  why 
should  we  live,  if  labor  is  all.  we  get  out  of  it? 
The  Church  of  the  Middle  Ages  was  consistent 
in  saying  that  we  live  to  work  and  thereby  to 
earn  eternal  reward  in  heaven ;  but  in  the  mod- 
ern age,  where  transcendental  religion  and  social 
life  are  kept  separate  conceptions,  we  do  not  live 
to  work  and  sleep,  or  eat  to  work,  but  we  work 
and  sleep  and  eat  to  live;  life  has  become  the 
object;  its  aim,  to  make  the  best  of  ourself  as 
individual,  as  member  of  the  family,  the  com- 
munity, the  nation,  and  of  mankind  in  general. 

If,  then,  work  and  sleep  and  eating  are  neces- 
sities of  living,  the  efficiency  of  life  is  measured 
by  how  large  a  part  of  our  life  we  have  at  dis- 
position for  ourselves,  not  occupied  by  neces- 

00 


THE  OTHER  SIDE 

sities,  but  free  to  fulfil  life's  aim  as  we  under- 
stand it. 

In  spite  of  the  enormous  advance  of  the 
human  race  in  the  hist  hundred  years,  the  in- 
crease of  efficiency  of  life  has  been  very  small. 

Let  us  look  at  it.  One  hundred  years  ago, 
man  worked  ten  hours  a  day,  an  average,  for 
300  days  during  the  year.    This  meant: 

Total  number  of  hours 

(luring  the  year 3Gj  X  24  =  8,7C0  hours  =  100% 

Sleeping  (8  hrs.  i)er  day) 

and  eating  (1  hr.) ...  365  X  9  =  3,985  hours  =  37.5% 
Working,  300  days  at 

10  hours 300  X  10  =  3,000  hours  =  34.4% 

Leaving    available    as 

free  time 2,475  hours  =  28.1% 

At  present,  with  an  eight-hour  workday,  work- 
ing 300  days  during  the  year,  it  means: 

Total  number  of  hours 

(luring  the  year 305  X  24  =  8,760  hours  =  100% 

Sleeping  (8  hrs.  per  day) 

and  eating  (1  hr.) ...  365  X  9  =  3,285  hours  =  37.5% 
Working,  300  days  at 

8  hours 300  X    8  ==  2,400  hours  =  27.4% 

Leaving    available    as 

free  time 3,085  hours  =  35.1% 

Thus,  in  spite  of  the  great  progress  during  the 
last  hundred  years,  the  efficiency  of  human  life 
has  increased  only  from  28. 1  per  cent,  to  35.1 

61 


AMERICA  AND  THE  NEW  EPOCH 

per  cent.,  or  by  7  per  cent.,  and  still  is  ex- 
tremely small,  35.1  per  cent. 

If,  however,  we  could  fully  realize  on  our 
advancements,  with  a  four-hour  day  and  200 
working-days,  the  record  would  stand: 

Total  number  of  hours 

during  the  year 3G5  X  24  =  8,760  hours  =  100%  ' 

Sleeping    (8    hrs.    per 

day),  eating  (1  hr.)  365  X  9  =  3,285  hours  =  37.5% 
Working,  200  days  at 

4  hours 200  X    4  =     800  hours  =    9.1% 

Leaving  available  as  free  time 4,G75  hours  =  53.4% 

This  would  give  53.4  per  cent,  as  a  maximum 
possible  efficiency,  under  the  present  conditions 
of  human  knowledge,  nearly  twice  as  much  as 
one  hundred  years  ago,  and  would  be  an 
advancement  worth  while. 


ENGLAND   IN   THE   INDIVIDUALISTIC   ERA 

WHILE  France  in  the  great  revolution  gave 
the  world  the  industrial  era,  England 
very  soon  took  the  leadership,  and  has  retained 
it  ever  since.  Various  causes  contributed:  the 
early  start  of  England  in  gradual  revolution 
from  the  industrial  centers  of  the  later  Middle 
Ages,  which  had  been  destroyed  on  the  Conti- 
nent by  the  perpetual  wars  of  the  absolute  mon- 
archies, but  survived  in  England;  the  protec- 
tion of  its  island  position  by  the  ocean,  which 
kept  hostile  armies  out  of  England  during  the 
Napoleonic  wars;  the  acquisition  of  a  great 
colonial  empire :  whenever  Napoleon  conquered 
and  annexed  another  country,  England  took  its 
colonies,  and  when  France,  after  its  final  defeat 
by  the  allies,  had  to  give  back  all  these  nations, 
England,  as  one  of  the  allied  "liberators,"  kept 
most  of  their  colonies,  and  so  India,  South 
Africa,  etc.,  became  English.     The  wealth  of 

5  63 


AMERICA  AND  THE  NEW  EPOCH 

England  in  coal  and  iron,  the  fundamental 
requisites  of  industrialism,  gave  her  a  great 
advantage.  But  most  instrumental  of  all,  and 
more  dominant  than  the  other  incidental  ad- 
vantages, was  the  strongly  individualistic  char- 
acter of  the  Anglo-Saxon  race,  which  gave  it  the 
leadership  in  the  individualistic  era,  and  supplied 
the  initiative  to  create  industrial  capitalism. 

England  thus  became  the  great  industrial 
country,  producing  and  supplying  the  world 
with  steel  and  iron,  textiles,  machinery,  and  all 
manufactured  goods,  England  became  the  uni- 
versal world's  supply  of  manufactured  goods, 
from  the  fetishes  and  idols  of  the  heathen  to 
the  Bibles  and  missionaries  to  convert  them. 
Free  trade,  early  established  in  England,  and 
consistently  maintained,  gave  a  cheap  supply  of 
food  and  raw  materials.  An  effective  i)ropa- 
ganda  spread  free  trade  to  the  other  nations, 
unrestrictedly  opened  their  markets  to  English 
products,  and  for  generations  retarded  the  de- 
velopment of  industries  in  other  nations,  and 
kept  them  industrial  dependencies — like  our 
nation  before  the  Civil  War.  England  was  a 
prosperous  industrial  nation  under  free  trade, 
and  so  the  other  nations  were  led  to  believe  if 
they  only  embraced  free  trade  they  would  be- 

G4 


ENGLAND  IN  THE  INDIVIDUALISTIC  ERA 

come  equally  industrial  and  prosperous.  It 
took  generations  to  realize  that  for  England  as 
a  dominating  industrial  nation,  having  no  in- 
dustrial competitor,  free  trade  was  an  advan- 
tage, but  no  industrial  development  could  hope 
for  success  in  another  nation  in  competition 
with  the  powerful,  highly  developed  industries 
of  England,  having  open  access  to  the  markets. 
We  may  listen  with  rather  mixed  feelings  to  the 
complaints  of  our  protectionists,  asking  for 
"protection"  of  our  "infant  industries,"  when 
we  hear  that  these  infant  industries  hold  first  or 
second  rank  in  the  world's  production,  and  often 
sell  their  products  in  the  foreign  markets 
cheaper  than  in  our  own  country;  but  in  the 
agricultural  America  before  the  Civil  War,  in 
the  agricultural  Germany  of  fifty  years  ago, 
any  new  industry  was  certain  to  be  crushed 
quickly  and  promptly  and  destroyed  by  Eng- 
land's dumping  competitive  products  regardless 
of  price — and  then  recuperating  by  higher 
prices  when  the  new  industry  had  been  de- 
stroyed. There  was  nothing  immoral  or  im- 
proper in  this;  it  is  done  to-day  by  every  in- 
dustrial nation,  as  it  is  the  law  and  code  of  the 
competitive  age — the  stronger  destroys  or 
absorbs  the  weaker. 

65 


AMERICA  AND  THE  NEW  EPOCH 

But  finally  the  other  nations — ^America  after 
the  Civil  War,  then  Germany  and  the  others — 
closed  their  gates,  developed  their  own  indus- 
tries, became  industrially  independent  of  Eng- 
land, and  finally  became  her  competitors  on 
the  markets  of  the  world. 

For  over  half  a  century,  however,  England 
Leld  the  markets  of  the  world  without  any 
competition.  Then  and  thus,  from  the  vast 
profits  of  this  time,  was  the  foundation  laid  of 
the  vast  financial  power  of  England,  which  still 
to-day  holds  the  world  in  bondage. 

With  the  development  of  America  and  Ger- 
many as  industrial  nations  began  the  decadence 
of  England's  industries.  Developed  at  an  earlier 
time  and  under  conditions  when  there  was  no 
serious  competition,  England's  industrial  sys- 
tem did  not  show  the  productive  efficiency  of 
its  later  competitors.  America  and  Germany 
both  organized  their  industries  on  a  larger  scale 
with  more  modern  conceptions,  and  especially 
they  utilized  to  the  fullest  extent  all  the  intel- 
lectual abilities  of  the  nation,  while  England 
failed  in  this  respect. 

England's  industrial  preponderance  had  been 
built  up  from  the  factory  and  the  machine-shop, 
by  men  working  up  from  the  ranks,  but  the 

G6 


ENGLAND  IN  THE  INDIVIDUALISTIC  ERA 

country's  higher  educational  institutions  had 
little  part  in  the  industrial  development.  Thus 
deprived  of  many  of  the  country's  best  intelli- 
gences, unable  to  secure  the  higher  industrial 
efficiency  which  comes  from  the  broad  and 
systematic  training  of  the  industrial  leaders  in 
technical  educational  institutions,  England's 
industries  found  themselves  at  an  increasingly 
serious  disadvantage  against  their  later  com- 
petitors, and  when,  in  the  last  decades,  the 
seriousness  of  the  situation  was  beginning  to  be 
realized,  remedial  action  was  difficult,  because 
the  educational  institutions,  not  receiving  the 
assistance  and  co-operation  of  the  industries, 
had  in  their  technological  branches  remained 
behind  the  engineering  schools  of  America  and 
Germany. 

In  these  latter  countries,  in  the  beginning  of 
the  industrial  awakening  a  close  co-operation 
and  practically  an  alliance  had  been  established 
between  the  industry  and  the  technical  college 
or  university.  The  industry  gave  preference  to 
the  college-trained  men — the  reverse  of  what 
was  the  rule  in  England — often,  as  in  the  elec- 
trical industry,  even  made  college  training  prac- 
tically mandatory  for  all  higher  positions,  and 
the  leaders  of  the  industry  devoted  consider- 

67 


AMERICA  AND  THE  NEW  EPOCH 

able  time  and  attention,  and  even  gave  material 
financial  assistance,  to  the  engineering  schools, 
opened  their  establishments  to  instructors  and 
students  of  these  schools,  advised  and  guided 
their  courses,  and  so  did  everything  to  make  the 
engineering  schools  most  useful  for  the  indus- 
tries, while  the  faculties  of  the  technical  schools 
quickly  realized  the  advantage  of  this  close  co- 
operation with  the  industry,  encouraged  it  to 
the  fullest  extent,  wherever  possible  selected 
their  instructors  from  the  industries,  in  short, 
availed  themselves  of  the  assistance  given  by 
the  industries. 

As  the  result,  with  the  exception  of  those 
industries  such  as  ship-building,  on  which  her 
existence  depended,  England,  once  the  only  in- 
dustrial nation,  dropped  behind  America  and" 
Germany,  especially  so  in  the'^nore  recent 
industries.  Thus  in  electrical  engineering,  in 
the  last  years  before  the  war,  when  there  was 
any  great  electrical  engineering  work  done  in 
England  or  her  colonies,  it  was  usually  "made 
in  America"  or  "made  in  Germany." 

Contributory  to  the  industrial  decadence  was 
England's  labor  situation.  In  the  early  days  of 
the  period  the  standard  of  living  of  the  British 
industrial  worker  was  relatively  high,  especially 

C8 


ENGLAND  IN  THE  INDIVIDUALISTIC  ERA 

so  in  comparison  with  the  masses  in  the  other, 
industrially  undeveloped  nations.  With  the  in- 
creasing power  of  industrial  capitalism  the 
standard  of  the  industrial  worker  was  gradually 
but  steadily  lowered,  and  with  it  his  industrial 
efficiency.  First  this  was  little  noticed,  es- 
pecially as  there  was  no  comparison  yet  with 
the  conditions  in  other  nations,  in  which  indus- 
trialism was  just  beginning,  and  even  after  the 
lowering  of  the  standard  of  living  became 
marked,  for  generations  conservatism  and  the 
strong  individualistic  tendency  of  the  English- 
men prevented  effective  organization  to  combat 
the  lowering  of  the  standard.  It  was  significant 
that  during  the  latter  part  of  the  nineteenth 
century,  at  the  numerous  international  con- 
gresses of  the  labor  interests  the  British  trade- 
unionists  either  held  ostentatiously  aloof,  or 
opposed  any  joint  national  or  political  action. 
When  finally,  in  the  last  years,  the  mass  or- 
ganization of  the  British  labor  elements  came 
industrially  and  politically,  it  came  with  a 
rush,  and  while  accomplishing  material  results 
in  arresting  the  downward  trend  of  the  stand- 
ard of  living,  it  had  the  defects  of  any  very 
rapid  growth:  the  absence  of  the  stability  and 
steadiness  of  development,  which  can  be  given 

C9 


AlVIERICA  AND  THE  NEW  EPOCH 

only  by  gradual  evolution,  but  not  by  revo- 
lutionary change;  the  preponderance  of  de- 
structive over  constructive  tendencies;  the  un- 
necessarily great  harm  to  the  industries  by  the 
cataclysmic  activities,  etc. 

By  this  time,  the  first  period,  that  of  England 
as  industrial  power,  had  passed;  other  nations 
had  forged  ahead  industrially,  and  England  had 
entered  the  second  period  of  her  capitalistic 
age,  that  of  England  as  financial  power. 

It  is  significant  to  realize  that  industrial  con- 
vulsions, such  as  strikes  of  half  a  million  or  a 
million  railway  workers,  miners,  etc.,  which 
would  have  paralyzed  and  plunged  into  indus- 
trial panic  any  other  nation,  passed  over  Eng- 
land without  any  appreciable  effect  on  her 
prosperity. 

What  mattered  it  to  England  that  she  lost 
the  American  market  and  American  industries 
grew  and  supplied  the  home  market  and  en- 
tered the  world's  market,  even  into  England, 
as  long  as  the  American  industries  were  financed 
by  British  capital  and  the  profits  of  the  Ameri- 
can industries  went  to  England,  hundreds  of 
millions  per  year,  as  dividends  and  interest  on 
British  investment  in  American  industries? 
What  mattered  it,  when  British  industries  de- 

70 


ENGLAND  IN  THE  INDIVIDUALISTIC  ERA 

clined,  as  long  as  all  over  the  world,  from  Mexico 
to  Ceylon,  and  from  China  to  South  Africa,  agri- 
culture and  industry,  financed  by  British  capi- 
tal, sent  their  profits  to  England,  and  the  entire 
world  thus  paid  tribute?  Not  political  tribute 
as  conquered  nations,  as  of  old,  but  tribute  just 
the  same — industrial  tribute — the  return  on 
British  capital  invested  all  over  the  world;  the 
capital  which  had  been  created  by  the  profits  of 
the  British  industries  during  the  time  when 
England  was  the  leading  industrial  nation,  and 
had  accumulated  ever  since. 

Thus  England  became  more  or  less  inde- 
pendent of  its  home  production,  became  the 
great  financial  power  of  the  world,  London  the 
world's  financial  center  which  controlled  the 
industries  of  the  nations,  and  so  England  be- 
came able  to  a  large  extent  to  live  on  the  re- 
turns of  her  capital  invested  throughout  the 
world. 

This  is  for  England  the  most  serious  side  of 
the  present  war.  It  is  British  capital  which 
must  bear  the  enormous,  almost  inconceivable 
financial  burden  of  the  war,  and  however  vast 
British  capital  is,  it  is  gradually  being  impaired 
by  the  steady  drain,  and  with  every  month 
that  the  war  continues,  the  reorganization  of 

71 


AMERICA  AND  THE   NEW  EPOCH 

England's  economic  system  after  the  war  be- 
comes more  certain,  the  necessity  of  recon- 
structing its  domestic  economy  so  as  to  carry 
a  much  larger  part  of  its  consumption  by  na- 
tional production,  less  by  industrial  exploitation 
of  other  nations  or  colonies — that  is,  to  live 
more  fully  on  its  productive  income,  less  on  the 
interest  of  its  capital. 

While  this  readjustment  and  retrenchment 
necessarily  must  lead  to  wide-spread  hardship, 
it  is  undoubtedly  the  best  that  could  have 
happened  to  England  as  a  living  nation.  No 
nation  has  yet  lived  as  parasite  on  the  work  of 
other  nations,  and  remained  alive;  so  the 
Roman  Empire  has  gone  to  decay;  so  Spain, 
when  after  the  discovery  of  America  the  riches 
of  the  new  continent  came  to  her  in  the  silver- 
fleets,  has  fallen  from  her  height  and  not  re- 
covered yet,  after  centuries. 

But  for  all  the  other  nations  of  the  world — 
those  which  were  "developed"  by  British  cap- 
ital— it  will  mean  reorganization  and  recon- 
struction, also;  an  industrial  depression  first, 
by  the  withdrawal  of  the  British  money,  which 
had  "made  the  wheels  go,"  and  then  a  gradual 
recovery  under  a  more  complete  national 
industrial  independence. 

li 


ENGLAND  IN  THE  INDIVIDUALISTIC  ERA 

In  our  country  the  conditions  have  been 
somewhat  different,  in  so  far  as  we  have  largely 
escaped  the  industrial  depression,  and  our  in- 
dustrial recovery  under  national,  American  cap- 
ital has  been  very  rapid.  Before  1893,  America 
was  practically  a  financial  dependency  of  Eng- 
land. After  the  panic  of  1893,  America's  finan- 
cial strength  gradually  rose,  and  during  the 
two  years  of  the  present  war  we  have  made  an 
enormously  rapid  progress  toward  financial 
independence,  largely  because  a  considerable 
part  of  the  British  capital,  which  had  to  be 
withdrawn  from  the  markets  of  the  world  to 
finance  the  war,  found  its  way  to  America  to 
pay  for  supplies,  food,  and  industrial  products. 

However,  we  must  not  overestimate  our 
position.  We  are  still  very  far  from  financial 
independence,  and  the  hope  to  see  the  world's 
financial  center  shift  from  London  to  New 
York  is  still  very  much  of  a  dream — far  from 
realization.  Not  a  dream,  however,  but  quite 
within  reach  is  the  opportunity  to  replace  Eu- 
ropean capital  by  American  capital  in  the  indus- 
trial development  of  those  countries  which  are 
within  our  sphere  of  influence — South  America, 
Central  America,  and  Mexico. 


VI 

GERMANY   IN   THE   INDIVIDUALISTIC   ERA 

THE  development  of  Germany  during  the 
individualistic  era  was  dominated  by  two 
features — the  late  arrival  of  capitalism,  and  the 
early  arrival  of  the  socialistic  movement.  In- 
dustrial capitalism  in  Germany  became  vic- 
torious a  generation  later,  while  a  powerful 
Social  Democratic  party  made  its  appearance  in 
Germany  a  generation  earlier  than  in  any  other 
nation.  The  result  was  that  before  the  con- 
flict between  capitalism  and  feudalism  was 
ended,  capitalism  had  already  to  meet  the  at- 
tacks of  socialism,  and  as  the  result  in  Germany 
industrial  capitalism  has  in  reality  never  gained 
as  complete  control  of  the  nation  and  its  gov- 
ernment as  was  the  case  elsewhere. 

The  reactionary  period  of  the  unholy  alli- 
ance was  broken  and  the  individualistic  era 
finally  established  in  France  by  the  revolution 

74 


GERMANY  IN  THE  INDIVIDUALISTIC  ERA 

of  1830  and  the  revolution  of  1848  swept  away 
the  last  remnant  of  feudalism  and  established 
individualism  all  over  Europe,  except  in  Prussia. 
There  the  revolution  of  1848  was  a  draw,  and 
the  final  conflict  between  capitalism  and  feu- 
dalism was  waged  in  the  Prussian  parliament 
in  the  early  60's.  Both  parties  endeavored  to 
get  the  assistance  of  the  labor  movement  which 
was  then  just  beginning.  Industrial  capitalism 
organized  labor  unions  on  the  lines  of  the  early 
British  trade-unions;  these  flourished  for  a 
little  while,  but  soon  weakened  and  died  before 
the  rising  tide  of  socialistic  labor  organization. 
Bismarck  endeavored  to  attach  the  young  So- 
cialist party  to  the  assistance  of  the  monarch- 
ical government,  but  nothing  but  complete 
surrender  of  the  monarchy  to  democratic  so- 
cialism would  have  satisfied  the  early  Socialists, 
while  the  movement  was  not  yet  suflSciently 
strong  to  cause  Bismarck  to  offer  material  con- 
cessions. Thus  a  three-cornered  fight  con- 
tinued. With  the  consolidation  of  Germany  un- 
der Prussian  leadership,  by  the  Austrian  and 
the  Franco-German  war,  capitalism  finally 
gained  the  control  of  the  nation,  but  at  the 
same  time  the  monarchy  became  so  firmly  es- 
tablished that  all  previous  dreams  of  the  re- 

75 


AMERICA  AND  THE  NEW  EPOCH 

formers,  of  republicanism  and  complete  democ- 
racy, vanished  forever. 

For  a  few  years  in  the  early  70's,  during  the 
business  prosperity  following  the  Franco-Ger- 
man war,  Germany  was  under  almost  complete 
capitalistic   government.     But   gradually   Bis- 
marck, as  the  leader  of  the  monarchical   forces, 
weakened  and  eliminated  the  more  radical  and 
oppositional    elements    of    industrialism    (the 
"democrats,"  "progressives,"  etc.),  while  the 
rising  Social  Democratic  vote  threatened  capi- 
talism and  the  monarchy  alike.    The  time  thus 
appeared  ripe  for  an  alliance  between  capitalism 
and  the  monarchy,  against  socialism;    capital- 
ism surrendering  its  demand  of  complete  control 
of  the  national  Government,  while  the  monarchy 
conceded  to  share  the  Government  with  capi- 
talism.   Such  an  alliance  thus  followed,  not  as  a 
formal  agreement  like  that  entered  into  between 
the  German  Social  Democracy  and  the  monarchy 
at  the  beginning  of  the  present  war,  but  as  a 
tacit  understanding.    The  ten  years'  war  against 
tlie  Social   Democratic  party   was  the  result, 
under  Bismarck  as  the  leader  of  the  joint  forces 
of  monarchy  and  industrial  capitalism.    Special 
laws  were  passed  against  socialism,  and  succes- 
sively made  more  rigorous;   labor  unions  were 

7G 


GERMANY  IN  THE  INDIVIDUALISTIC  ERA 

dissolved  and  their  funds  confiscated;  indus- 
trial strikes  suppressed  by  the  military  power 
of  the  Government;  the  Social  Democratic  party 
outlawed,  its  leaders  expatriated  and  driven  as 
homeless  wanderers  from  place  to  place;  all 
socialistic  publications  in  Germany  suppressed; 
the  introduction  into  Germany  of  socialistic  lit- 
erature punished  by  heavy  prison  sentences, 
and  new  judicial  interpretations  created  by  the 
governmental  judges.  For  instance,  the  official 
paper  of  the  Social  Democratic  party  was  pub- 
lished weekly  in  Switzerland,  as  publication  in 
Germany  was  forbidden.  Its  introduction,  sale, 
and  distribution  in  Germany  were  forbidden.  In 
the  first  years  of  the  war  against  socialism,  only 
those  were  punished  who  were  convicted  of 
selling  or  distributing  the  paper.  Later  on  the 
possession  of  several  copies,  even  only  two,  of 
the  same  number,  was  accepted  by  the  judges 
as  evidence  of  the  intention  of  distributing  the 
paper,  and  finally  men  were  punished  with  six 
months  in  prison  for  having  a  single  copy  of  the 
paper,  on  the  ground  that  in  getting  the  copy 
of  the  paper  they  had  "induced  the  editor  [in 
Switzerland]  to  distribute  the  paper  and  thereby 
to  break  the  law.'* 

The  ten  years'  war  was  won  by  the  Socialists, 

77 


AMERICA  AND  THE  NEW  EPOCH 

and  the  allied  forces  of  industrial  capitalism  and 
the  monarchical  government  defeated;  the  per- 
secution of  the  Socialists  had  to  be  abandoned, 
the  special  laws  against  socialism  dropped,  and 
the  Social  Democrac}^ — now  swollen  to  a  party 
of  over  a  million  votes — recognized  as  a  legiti- 
mate political  party,  and  Bismarck,  defeated 
and  discredited,  had  soon  to  relinquish  his 
power  and  retire  into  private  life. 

Then  began  the  reorganization  of  the  Ger- 
man nation,  the  change  from  individualism 
toward  co-operation,  which  has  made  the  in- 
dustrial Germany  of  to-day. 

In  the  mean  time  a  new  emperor,  the  present 
Kaiser,  had  ascended  the  throne,  while  politi- 
cally and  industrially  the  conflict  was  raging 
between  the  remnant  of  feudalism,  represented 
by  the  "Junkers,"  the  industrial  capitalism,  and 
the  Social  Democrac3\ 

First  the  new  Emperor  reorganized  the  army 
and  got  complete  control  of  it.  This  assured 
the  safety  of  the  monarchy  against  any  revo- 
lutionary opposition,  but  also  gave  him  the 
name  of  the  "War  Lord,"  which  in  foreign 
countries  has  clung  to  him  until  to-day. 

By  an  effective  progressive  social  legislation 
the  masses  were  conciliated  and  attached  to  the 

78 


GERMANY  IN  THE  INDIVIDUALISTIC  ERA 

monarchy,  and  socialism,  deprived  of  its  revo- 
lutionary character,  became  an  evolutionary 
party,  grew  to  the  largest  and  most  powerful 
political  party,  with  six  million  votes,  and  by 
its  demands  and  criticism  pushed  forward  the 
social  and  industrial  reorganization.  Thus  by 
effective  and  liberal  governmental  old-age  insur- 
ance, sickness  insurance,  and  unemployment  in- 
surance, the  three  great  fears  which  hung  over 
the  masses  in  all  other  countries,  were  elimi- 
nated, extreme  poverty  vanished,  slums  disap- 
peared, and  the  condition  of  the  masses  became 
superior  to  that  in  all  other  countries,  even  in 
America,  where  the  neglect  of  social  legislation 
is  gradually  making  itself  felt  now.  The  out- 
ward sign  was  the  disappearance  of  immigra- 
tion from  Germany,  in  spite  of  the  rapidly  in- 
creasing population;  the  inward  evidence  the 
absolute  unanimity  with  vvhich  the  masses,  led 
by  the  Social  Democratic  party,  stood  back  of 
the  Government  in  the  present  war. 

Corporate  organization  of  the  industries  was 
assisted  and  pushed,  often  to  the  extent  of  the 
Government  or  the  Emperor  personally  partici- 
pating financially. 

The  industrial  organizations  were  encour- 
aged to  expand  and  to  combine,  consolidation 

6  79 


AMERICA  AND  THE  NEW  EPOCH 

of  corporations  to  syndicates  and  trusts  assisted 
by  the  Government  and  even  enforced — as  in 
the  potash  syndicate — but  at  the  same  time  an 
effective  supervision  and  close  control  of  the 
corporations  and  trusts  estabhshed  to  safe- 
guard the  people  against  any  possible  abuse  of 
the  corporate  power. 

The  result  was  that  the  antagonism  of  the 
masses  against  the  corporations,  which  here  in 
America  paralyzes  our  rapid  industrial  progress 
and  threatens  to  destroy  our  prosperity  by  in- 
terfering with  the  industries'  most  effective  tool, 
the  corporation,  has  never  appeared  in  Ger- 
many, but  consolidation  has  proceeded  un- 
checked. 

The  educational  system  was  reorganized,  and 
the  university  idea  extended  Into  the  industrial 
field,  and  a  universal  system  of  industrial  edu- 
cation established,  from  the  vocational  school 
which  takes  the  graduate  of  the  public  schools 
and  does  in  a  more  efficient  manner  what  the 
apprenticeship  of  former  times  did,  the  teaching 
of  a  trade,  up  to  the  large  polytechnic  schools 
leading  to  the  highest  fields  of  engineering. 

Thus  the  individualistic  age  of  everybody  for 
himself  gradually  gave  way  before  a  co-opera- 
tive organization  of  the  nation,  giving  every- 

80 


GERMANY  IN  THE  INDIVIDUALISTIC  ERA 

body  the  best  opportunities  for  his  or  her  devel- 
opment as  an  efficient  and  effective  member  of 
society,  guaranteeing  to  everybody  the  right  to 
Hve,  but  imposing  the  duty  to  work. 

The  result  was  obvious:  an  enormous  in- 
crease of  efficiency  in  every  direction,  in  indus- 
try, science,  commerce,  and  administration. 
Thus  Germany  became  the  leading  industrial 
nation  of  the  world,  forcing  England  into  sec- 
ond rank,  and  making  it  difficult  even  for  our 
country,  in  spite  of  our  vast  natural  resources, 
to  hold  our  own. 

With  the  conquest  of  the  markets  of  the 
world  by  industrial  Germany  came  wealth,  and 
Germany  became  a  financial  power,  and  British 
capital  began  to  meet  the  competition  of  Ger- 
man capital  in  the  exploitation — or  "develop- 
ment," as  we  call  it — of  foreign  countries.  It  is 
true  that  England's  financial  strength  was,  and 
still  is,  very  much  greater  than  Germany's. 
But  England,  no  more  the  leading  industrial 
nation,  needed  the  return  of  her  invested  cap- 
ital for  her  support,  while  Germany  still  more 
than  supported  herself  by  her  industries,  and 
the  returns  of  her  foreign  investments  thus  were 
additional  wealth.  Therefore,  in  her  foreign 
investments  Germany,  not  depending  on  the 

81 


AMERICA  AND  THE  NEW  EPOCH 

returns,  could  offer  terms  whicli  England,  de- 
pending on  the  return  of  her  capital  for  her 
support,  could  not  meet,  and  Germany's  rising 
financial  power  thus  not  merely  threatened 
England's  prosperity,  but  threatened  the  very 
existence  of  the  British  nation.  For  some  time 
matters  were  compromised;  in  the  Morocco  af- 
fair, in  the  interference  of  German  capitalistic 
interests  with  the  consolidation  of  England's 
African  empire  (Cape  to  Cairo  railroad,  etc.)» 
in  the  Bagdad  railway,  etc.  But  inevitably  a 
final  conflict  had  to  come,  and  to  allow  Ger- 
many's increasing  financial  power  to  drive 
British  capital  out,  or  reduce  its  returns  to  the 
low  values  which  Germany's  surplus  capital 
could  meet,  meant  suicide  for  England. 

Thus  either  England  or  Germany  had  to  be 
wiped  out  as  a  financial  power,  and  for  England 
this  would  have  meant  national  disaster.  Fi- 
nancially, English  capital  could  not  fight  Ger- 
man capital,  as  explained  above,  and  the  only 
possible  solution  thus  was  recourse  to  force — 
that  is,  war. 

Thus  it  is  true  that  in  this  war  England  is 
fighting  for  her  existence;  she  is  fighting  for 
her  financial  supremacy,  and  on  this  depends 
tile  existence  of  the  England  of  to-day. 

82 


GERISLVNY  IN  THE  INDIVIDUALISTIC  ERA 

But  in  this,  also,  lies  England's  weakness  in 
the  present  war.  It  was  easy  for  the  German 
Government,  by  merely  repeating  the  loose  talk 
indulged  in  England  at  the  beginning  of  the 
war,  of  "crushing  the  Prussian  Empire,"  and 
"breaking  up  Germany  in  many  little  inde- 
pendent nations,"  etc.,  to  make  all  Germans 
realize  that  they  were  fighting  for  the  existence 
of  their  nation,  and  therewith  of  their  superior 
social  and  industrial  conditions.  But  it  is  much 
more  difficult  to  make  the  masses  of  England 
realize  that  in  fighting  for  British  financial  su- 
premacj^  they  are  fighting  for  their  own  wel- 
fare, especially  when  they  feel  that  they  ha^^e 
not  shared  in  England's  financial  prosperity, 
that  England's  financial  power  has  contributed 
rather  to  the  lowering  of  their  standard  of  living, 
by  making  England  independent  of  its  indus- 
trial success,  and  that  all  that  they  have  se- 
cured in  the  last  years  was  by  fighting  against 
the  same  financial  powers  which  now  call  upon 
them  for  help  against  Germany. 

This  explains  the  great  difficulty  England 
has  in  raising  her  armies,  while  Germany  has  no 
such  difficulties;  it  is  obvious  that  b^''  nature 
the  Anglo-Saxon  is  no  less  patriotic  than  the 
Teuton. 

83 


AMERICA  AND  THE  NEW  EPOCH 

It  explains,  also,  why  all  the  reasons  given  as 
the  cause  of  the  war  appear  so  insignificant  and 
insufficient  to  explain  the  catastrophe.  They 
are  not  the  reason,  but  are  mere  incidents;  but 
the  real  reason,  the  inevitable  clash  between 
Germany's  rising  financial  power  and  England's 
threatened  financial  supremacy,  on  which  her 
existence  depends,  could  not  be  given,  as  it  is 
not  such  as  to  be  generally  understood,  not 
such  as  to  cause  the  universal  national  enthu- 
siasm which  is  required  to  lead  a  successful  war. 

It  explains  that  tlie  war  was  inevitable,  just 
as  that  of  the  feudal  nations  against  the  French 
Republic  at  the  end  of  the  eighteenth  century, 
Germany,  organized  as  a  co-operative  central- 
ized industrial  nation,  could  not  be  defeated  in 
the  industrial  or  financial  field  by  the  individual- 
istic industrial  capitalism  of  England  and  the 
other  nations. 

Thus  the  present  world's  war  is  the  conflict 
between  the  passing  era  of  individualistic  in- 
dustrialism and  the  coming  era  of  co-operative 
industrial  organization,  the  former  represented 
by  England,  the  latter  by  Germany.  It  thus 
constitutes  an  epoch  in  the  history  of  man  just 
as  that  ushered  in  by  the  French  Revolution, 
which  made  the  transition  from  feudalism  to 

84 


GERMANY  IN  THE  INDIVIDUALISTIC  ERA 

iiidividiuilism.  And  in  many  other  respects 
there  is  a  striking  similarity.  One  nation — 
France  in  the  previous,  Germany  in  the  present, 
epoch — adopted  the  new  principles  and  intro- 
duced them  in  its  national  organization,  and 
the  increase  in  its  economic  efficiency,  resulting 
from  the  new  era,  threatened  the  stability  and 
safety  of  the  nations  which  held  to  the  old 
era,  and  caused  them  to  ally  themselves  against 
the  reformer  in  the  attempt  to  suppress  by 
forcible  means,  by  war,  the  "dangerous"  new 
conceptions  of  human  society.  Just  as  the  in- 
dividualistic era  conquered,  though  France,  its 
exponent,  was  finally  defeated  in  the  field  of 
Waterloo,  so  in  the  present  war  the  new  era 
of  co-operative  organization  has  conquered, 
whatever  may  be  the  outcome  of  the  military 
war;  for  already  England,  the  exponent  and 
leader  of  individualism,  had  to  throw  over  all 
her  individualistic  tenets  and  adopt  as  rapidly- 
as  possible  the  co-operative  organization,  which 
has  created  Germany's  industrial  strength  and 
therewith  the  danger  to  the  other  nations. 
Thus  we  see  in  free  and  individualist  England 
such  tyrannical  interference  with  personal  lib- 
erty as  contained  in  the  "Defense  of  the  Realm 
Act,"  compulsory  military  conscription,  requi- 

85 


AMERICA  AND  THE  NEW  EPOCH 

sition  of  private  factories  for  military  use,  gov- 
ernmental blacklisting  of  private  corporations 
which  refuse  to  co-operate,  commandeering  of 
private  property  by  the  exchange  against  war 
loans,  of  industrial  securities  deposited  in  trust 
and  fiduciary,  interference  with  luxuries,  food, 
etc.,  and  even  here  in  America,  far  away  from 
the  war,  we  talk  about  preparedness,  compul- 
sory military  training,  mobilization  of  the 
industries,  etc.,  etc. 

Thus,  even  if  Germany  should  be  utterly 
defeated  and  crushed,  it  would  be  only  by  the 
adoption  b}'  the  Allies  of  the  co-operative  indus- 
trial organization  against  which  they  went  to 
war,  and  the  era  of  individualism  thus  is  passed 
forever,  though  a  temporary  reaction  may  still 
give  it  an  apparent  but  short  life,  and  the  era  of 
co-operative  social  organization  is  at  hand. 


VII 

THE    OTHER    EUROPEAN    NATIONS    IN    THE    INDI- 
VIDUALISTIC  ERA 

FRxVNCE  has  never  become  a  great  industrial 
country  like  England  or  Germany.  Weak- 
ened by  a  generation  of  continual  war  under 
the  first  Napoleon,  its  recovery  retarded  by  the 
reactionary  period  under  the  unholy  alliance 
and  the  revolutions  of  1830  and  1848,  which  led 
to  the  Second  Empire  with  its  repeated  wars, 
and  ended  in  the  disastrous  Franco-Prussian 
war,  France  never  had  the  chance  of  undis- 
turbed industrial  development  which  other 
nations  had.  The  decreasing  birth-rate,  and 
finally  the  decreasing  population,  made  the 
social  problem  less  severe  than  in  nations  with 
rapidly  increasing  population,  as  Germany, 
where  national  production  had  to  provide  not 
only  for  the  existing  population,  but  for  a  great 
increase  of  population.  Adding  hereto  the 
thrift  and  the  saving  habits  of  the  French,  it 

87 


AMERICA  AND  THE   NEW  EPOCH 

is  easily  understood  that  France  became  a 
wealthy  country,  with  the  wealth  rather  dis- 
tributed in  moderate  fortunes  throughout  the 
entire  population,  and  not  massed  in  a  few 
vast  fortunes,  surrounded  by  a  poverty-stricken 
population,  as  in  the  industrial  nations. 

Though  France  was  unable  to  compete  with 
England  or  Germany  in  supplying  the  standard 
industrial  products  to  the  world's  markets,  the 
inborn  artistic  temperament  of  the  French  na- 
tion made  France  successful  in  a  limited  but 
very  profitable  field,  and  in  all  those  industries 
in  which  an  artistic  sense  is  necessary  France 
became,  and  is  to-day,  predominant  in  the 
markets  of  the  world,  and  has  no  competition 
to  fear. 

Thus  the  waves  of  the  conflict  for  industrial 
supremacy  between  England,  Germany,  and 
America  left  France  untouched. 

France's  rising  financial  power  was  repeatedly 
set  back — by  the  extravagance  of  the  Second 
Fmpire,  by  the  war  indemnity  to  Germany,  and 
remained  small  compared  with  that  of  England, 
and  in  any  case  did  not  threaten  England's 
supremacy;  as,  due  to  the  French  national  tem- 
perament, French  capital  was  to  a  small  extent 
only  invested  in  industrial  exploitation  of  for- 


OTHER  EUROrEAN  NATIONS 

oign  countries.  French  capital  built  the  Suez 
Canal,  while  the  world  stood  by,  scoffing;  but 
when  it  proved  a  success,  England  appropriated 
it.  The  attempt  to  build  the  Panama  Canal 
proved  an  impossible  task,  and  tropical  disease 
conquered;  it  was  only  after  medical  science 
had  conquered  tropical  disease,  largely  by  the 
work  of  the  American  Medical  Staff  in  Cuba 
and  in  the  Philippines,  that  the  construction  of 
the  Panama  Canal  became  possible  and  was 
accomplished  by  our  country. 

The  disastrous  financial  failure  of  the  French 
Panama  companies  discouraged  French  in- 
vestors, and  since  that  time  French  wealth  has 
largely  gone  into  governmental  loans  of  foreign 
nations,  especially  Russia.  Thus,  when  after 
Russia's  defeat  bj^  Japan  Russia,  nearly  bank- 
rupt, was  threatened  by  dissolution,  and  Po- 
land, the  Baltic  provinces,  and  Finland  rose  in 
revolution,  it  was  French  money  which  came 
to  Russia's  assistance;  it  was  the  money  of  the 
French  Republic  which  enabled  the  Russian 
autocracy  to  subjugate  the  nations  which  had 
tried  to  free  themselves  from  the  Russian  yoke. 

When  the  final  conflict  between  England  and 
Germany  approached,  France  hesitated  for  a 
moment.     But   the   English-speaking   nations 

89 


AMERICA  AND  THE  NEW  EPOCH 

were  her  best  customers;  the  defeat  in  the 
Franco-German  war  of  1870-71  still  rankled, 
and  when  Russia  joined  England  the  large  in- 
vestments in  Russian  loans  needed  protection, 
and  thus  France  joined  the  Allies. 

Russia  has  not  yet  approached  the  individ- 
ualistic era,  but  is  still  deep  in  feudalism.  An 
autocratic  monarchy,  discouraging  and  oppos- 
ing intelligence  and  education,  a  small  intellec- 
tual minority,  fully  as  educated,  intelligent, 
and  able  as  the  intellectual  classes  in  any  other 
country,  but  helpless  and  not  backed  by  a 
nation;  over  80  per  cent,  of  the  masses  are  still 
essentially  serfs,  are  illiterate  and  thereby 
deprived  of  the  means  of  communication  be- 
yond their  immediate  surroundings,  hence 
barred  from  any  intelligent  political  activity. 
The  attenuated  parliamentarism,  represented 
by  the  Duma,  thus  can  be  a  shadow  only;  but 
if  it  were  real  and  the  Duma  had  the  power  of 
the  British  Parliament,  it  would  probably 
plunge  the  nation  in  still  greater  misery  by  sub- 
stituting an  irresponsible  oligarchy  for  the  auto- 
cratic monarchy.  It  is  significant  that  the  con- 
ditions of  the  Russian  masses  have  been  best 
when  a  strong  autocrat  ruled,  and  most  un- 
favorable under  a  weak  ruler  like  the  present, 

DO 


OTHER  EUROPEAN  NATIONS 

when  a  self-constituted  group  of  dukes  and 
bureaucrats  exploited  the  nation. 

The  "awakening"  of  a  "new  Russia"  by  the 
present  war,  of  which  we  hear  so  much,  thus  is 
an  idle  dream;  as  a  nation  Russia  is  further 
behind  than  Japan  was  when  the  American 
ships  opened  it  to  Western  civilization;  and  it 
took  Japan  two  generations  to  rise  to  equality 
with  the  Western  civilized  nations.  ^Vhat  Rus- 
sia needs  is  not  political  freedom  and  parlia- 
mentarism, but  an  enlightened  autocrat  like 
Frederic  II.  of  Prussia  was  in  the  middle  of  the 
eighteenth  century,  who  establishes  schools 
everywhere  throughout  the  country,  and  forces 
all  the  people  to  send  their  children  to  school. 
Then,  in  a  generation,  Russia  can  begin  to 
think  of  self-government. 

Industrially,  Russia  is  a  nation  of  vast  un- 
developed resources,  requiring  capital  for  its 
development,  just  as  Mexico,  South  America, 
China  does,  and  as  our  country  did  two  gen- 
erations ago. 

But  such  development  by  foreign  capital 
means  exploitation.  While  the  country  becomes 
prosperous — as  Mexico  was  under  Diaz — the 
prosperity  is  not  for  the  natives  of  the  country, 
but  the  wealth  of  the  country,  from  mines  and 

91 


AMERICA  AND  THE  NEW  EPOCH 

plantations,  enriches  foreign  nations,  and  the 
lot  of  the  natives  is  a  steady  depression  of  their 
standard  of  living  toward  serfdom,  or,  as  we 
now  call  it,  peonage.  Our  country  has  luckily 
escaped  this  faLc,  due  to  the  enterprise  and 
ability  of  the  mixed  races  which  had  settled  it; 
but  in  the  Mexico  of  to-day  we  see  the  result 
of  the  development  of  a  country  by  foreign 
capital  in  the  individualistic  era.  Russia  be- 
fore the  war  was  being  "developed"  largely  by 
the  Germans,  and  much  of  the  hatred  of  the 
Russian  against  the  German  thus  is  of  the  same 
nature  as  that  of  the  Mexican  against  the 
American. 

Politically,  Russia's  position  has  been  con- 
sistent for  centuries.  Christianized  from  Con- 
stantinople, by  the  Greek  Catholic  church,  it 
was  under  the  influence  of  the  East  Roman 
Empire,  and  when  this  empire  ended  by  the 
conquest  of  Constantinople  by  the  Turks  in 
1453,  the  Russian  ruler,  related  by  marriage 
to  the  last  Paln'ologus,  naturally  considered 
himself  as  the  heir  to  East  Rome,  and  the  dream 
of  Russia  has  been  ever  since  the  restoration  of 
the  East  Roman  Empire  as  pan-Slavic  power, 
with  the  Czar  as  ruler  in  the  old  capital  "Czar- 
grad" — Constantinople — just  as  the  dream  of 

92 


OTHER  EUROPEAN  NATIONS 

the  Germans  in  the  Middle  Ages  was  the  resto- 
ration of  the  West  Roman  Empire,  of  German 
nationality. 

Twice  Russia  was  close  to  the  goal;  in  the 
first  half  of  the  nineteenth  century  (1839), 
when  my  countryman,  Diebitsch  Sabalkanski, 
forced  the  "impregnable"  Balkan  range,  and 
finally  in  1878,  when  the  Russian  army  had 
penetrated  to  the  walls  of  Constantinople,  but 
both  times  it  was  defeated  by  British  jealousy; 
the  British  war  fleet,  passing  the  Dardanelles, 
anchored  before  Constantinople,  and  the  Con- 
gress of  Berlin,  under  Bismarck  and  Lord  Bea- 
consfield,  >tore  up  the  peace  of  San  Stephano. 
Baffled  in  the  Balkans,  Russia  then  turned  her 
eyes  toward  a  Pacific  empire,  but  here  again 
England's  backing  of  Japan  led  to  Russian  de- 
feat. England  feared  for  her  Indian  empire, 
which  Russia's  rising  power  seemed  to  threaten, 
as  in  central  Asia  the  Russian  frontier  had  grad- 
ually crept  close  to  the  northern  frontier  of 
India. 

The  territory  conquered,  "liberated"  by  Rus- 
sia in  the  Balkans,  which  England  did  not  allow 
her  to  retain,  was  formed  into  small  separate 
nations,  under  Turkish  sovereignty,  and  so 
Roumania,  Servia,  Bulgaria,  originated.     Rus- 

93 


AMERICA  AND  THE  NEW  EPOCH 

sia  accepted  tliis  as  a  transition  state,  a  tempo- 
rary condition,  until  the  time  when  Russia  could 
completely  absorb  these  countries,  as  she  had 
done  with  Poland  and  Finland,  as  England  did 
with  Egypt,  and  Austria  with  Bosnia.  But 
after  some  time  these  nations  began  to  take 
themselves  seriously,  developed  a  national 
individuality,  especially  the  more  highly  civil- 
ized ones — Roumania  and  Bulgaria — and  re- 
fused to  be  swallowed,  and  now  lie  as  a  barrier 
between  Russia  and  her  Turkish  prey.  xAt  the 
treaty  of  Berlin,  in  1878,  England  erected  still 
another  and  stronger  barrier  against  Russia, 
when  she  gave  Bosnia  and  the  Herzegovina — 
which  had  been  destined  for  Servia — to  Austria, 
and  thus  established  Austria  on  the  Balkan 
Peninsula.  Naturally  then,  Servia,  deprived  of 
its  booty,  has  ever  since  leaned  toward  Russia, 
and  become  practically  a  Russian  dependency, 
while  Roumania  and  Bulgaria  gravitated  into 
the  Austrian  sphere  of  influence,  since  it  was 
Russia  which  threatened  their  national  exist- 
ence, by  considering  them  as  a  temporary  ar- 
rangement, pending  absorption  by  Russia. 
Thus  the  alignment  of  these  nations  in  the 
present  war  was  to  be  expected,  in  spite  of  the 
enmity  between  Bulgaria  and  Roumania,  en- 


OTHER  EUROPEAN  NATIONS 

gendered  by  the  second  Balkan  war.  Racial 
differences  contributed:  Scrvia  is  Greek  Cath- 
olic Slav,  like  Russia.  Roumania,  however,  is 
Latin,  is  the  last  colony  of  the  ancient  Roman 
Empire,  its  language  closer  to  the  Latin  of  the 
later  empire  than  any  other  modern  language, 
and  it  is  thereby  closely  attached  to  Italy. 
Bulgaria,  while  speaking  a  Slav  language  since 
the  days  of  the  great  Servian  Empire  of  the 
Middle  Ages,  is  of  different  race  from  Slav  or 
Latin,  nearer  related  to  the  Magyar  race  of 
Hungary. 

Thus  England,  fearing  Russia,  had  closed  and 
double-locked  the  gates  against  Russian  expan- 
sion in  the  Balkans,  had  made  the  Dardanelles 
a  closed  strait,  so  as  to  blockade  Russia  in  the 
Black  Sea.  But  when  the  greater  danger  from 
Germany's  rising  financial  power  threatened, 
England  withdrew  her  objection  against  Rus- 
sia's occupation  of  Constantinople,  and  prom- 
ised her  assistance  to  this  end.  This  attached 
feudal  Russia  to  individualistic  England. 

But  there  is  still  the  old  divergency  of  inter- 
est and  mutual  suspicion  between  Russia  and 
England,  and  makes  itself  felt  to  the  disad- 
vantage of  the  Allies  in  this  war;  England's  aim 
is  to  destroy  Germany,  but  to  save  Austria  as 

7  95 


AMERICA  AND  THE  NEW  EPOCH 

much  as  possible  as  future  counter-weight 
against  Russia.  Therefore,  also,  the  British 
expedition  into  Mesopotamia,  into  Persia,  to 
occupy  as  much  Turkish  territory  as  possible, 
and  to  keep  it  frojn  falling  into  Russia's  hands. 
On  the  other  hand,  Russia  would  prefer  Ger- 
many to  remain  sufficiently  strong  to  keep 
England  in  check  after  the  war,  but  desires 
Austria,  the  barrier  in  the  Balkans,  destroyed. 
Therefore  Russia  consistently  directed  her 
drives  against  Austria,  in  her  own  interest,  in- 
stead of  against  Germany,  in  England's  interest. 
There  are  probably  differences  of  interest, 
also,  within  the  Central  Powers,  though  less  pro- 
nounced. Germany  is  the  nation  which  threat- 
ened the  individualistic  era  by  her  co-operative 
industrial  organization,  and  Austria  is  the  most 
conservative  and  correspondingly  backward 
nation  within  this  group,  while  Hungary  is 
closely  attached  to  Germany  in  its  social  in- 
dustrial development,  as  well  as  politically. 
When  in  1848  Hungary  attempted  to  make  her- 
self independent,  a  Russian  army  reconquered 
her  for  Austria,  while  Prussia's  victory  over 
Austria  in  1866  gave  Hungary  its  freedom.  Aus- 
tria, as  the  weakest  member,  had  to  be  pulled 
along  by  her  two  stronger  neighbors,  Germany 

9G 


OTHER  EUROPEAN  NATIONS 

and  Hungary.  Thus  when  in  the  first  year  of 
the  war  Austria's  military  organization  broke 
down,  Germany  reorganized  the  armies;  when, 
later  on,  the  economic  pressure  resulting  from  the 
food  blockade  threatened  Austria,  Germany 
again  had  to  organize  Austria's  internal  economy. 

Austria,  however,  was  the  leading  nation  in 
central  Europe  before  Germany.  Her  emperor  is 
of  the  oldest  and  most  exclusive  roj^al  family-, 
her  nobility  still  far  more  self-conscious  than 
that  of  Germany,  and  there  naturally  remained 
some  feeling  of  jealousy  against  Germany  as  the 
upstart  leader.  It,  therefore,  is  probably  not 
without  intention  that  Germany  does  not  like 
to  see  Austria  become  too  prominent.  Thus 
Germany's  help  against  Servia  came  only  when 
the  Turkish  Empire  found  itself  in  such  danger 
as  to  make  German  assistance  necessary.  In 
this  connection  it  may  be  significant  that  while 
the  German  drive  against  Russia  in  1915  carried 
the  frontier  of  the  Central  Powers  forward  for 
hundreds  of  miles,  beyond  the  limits  of  Poland, 
in  the  southeast  corner  of  Galicia  some  Austrian 
territory  was  left  in  Russian  hands,  and  the 
Allies  in  Salonica  and  the  Italians  in  Avlona 
were  allowed  to  retain  their  hold. 

Poland  as  an  independent  state  ended  over  a 

97 


AMERICA  AND  THE  NEW  EPOCH 

century  ago,  and  was  divided  between  Austria, 
Prussia,  and  Russia.  But  as  a  nation  Poland 
still  lives;  indeed,  the  national  self-conscious- 
ness of  the  Poles  greatly  increased  after  the  dis- 
memberment of  the  nation,  just  as  that  of  Ger- 
many in  the  period  after  the  Thirty  Years'  War. 
The  large  and  valuable  Polish  literature  prac- 
tically all  dates  from  the  time  after  the  division 
of  Poland.  The  Poles  were  a  civilized  nation 
long  before  the  Russians;  they  were  Christian- 
ized from  the  west,  from  Rome,  are  Roman 
Catholics,  and  between  them  and  the  Greek 
Catholic  Russians  stands  the  unbridgeable  bar- 
rier of  hatred,  which  is  greater  than  any  other 
among  men,  that  of  religious  persecution  and 
oppression.  Germany  has  politically  oppressed 
the  Poles,  but  Germany  has  little  Polish  terri- 
tory, and  even  there  the  majority  of  the  popu- 
lation is  German,  because  Prussian  Poland  was 
given  to  Russia  by  Napoleon,  after  Prussia's 
defeat.  Austria  has  a  large  Polish  population 
in  Galicia.  Austria  has  never  oppressed  the 
Poles,  but  has  given  them  equal  political  and 
social  rights,  so  that  there  is  little  enmity  be- 
tween Austrian  and  Pole,  and  as  Austria  is  the 
leading  Roman  CathoHc  nation,  the  Poles  have 
begun  to  look  toward  Austria  as  their  protector, 

98 


OTHER  EUROPEAN  NATIONS 

since  their  old  protector,  France,  betrayed  them 
when,  after  the  Japanese  war,  France  financed 
Russia  to  defeat  Poland's  attempt  for  independ- 
ence, and  England  abandoned  the  Poles  in 
allying  herself  with  Russia. 

Thus  a  reconstructed  Poland,  too  small  a 
nation  to  stand  entirely  independent,  would 
probably  gravitate  toward  Austria  as  protector, 
assuming  a  position  similar  to  Hungary. 

Switzerland  has  an  army,  small,  but  not  neg- 
ligible, and  while  entirely  surrounded  by  the 
war,  situated  as  it  is  on  the  heights  of  the  Alps, 
no  convenient  pathway  of  armies  leads  through 
it,  and  thus  its  neutrality  is  not  likely  to  be 
violated  like  that  of  Greece  or  Belgium. 

Greece  is  the  only  nation  whose  entire  inter- 
est is  to  remain  neutral  at  any  sacrifice,  for  an 
alliance  with  the  Central  Powers  would  be  sui- 
cide, with  the  enormous  coast-line  exposed  to 
the  attacks  of  the  Allies,  while  a  union  with  the 
Allies  would  bring  down  the  thunderbolt  in  the 
fate  of  Servia  and  Belgium. 

The  Turkish  power  has  been  steadily  declin- 
ing since  the  days  of  Suleiman  II.,  and  if  it  had 
not  been  for  the  jealousy  of  the  European  na- 
tions the  Turks  would  have  been  driven  out  of 
Europe  long  ago.    But  for  a  century  England 

99 


AMERICA  AND  THE  NEW  EPOCH 

protected  Turkey  against  Russia — at  a  price, 
however:  Cyprus,  Egypt,  and  the  Sudan,  etc. 
When  abandoned  by  England,  in  her  approach 
to  Russia,  Turkey  naturally  allied  herself  with 
Germany  as  the  only  great  military  power 
which  had  no  frontier  adjoining  Turkey  and 
thus  did  not  endanger  the  integrity  of  the 
remnant  of  the  Turkish  Empire,  but  merelj^  de- 
sired commercial  exploitation  as  compensation. 
It  must  be  realized,  however,  that  there  has 
been  an  awakening,  and  a  revival  of  Moham- 
medanism resultant  from  the  war.  Christianity 
has  preached  for  twenty  centuries,  "Love  your 
enemies,"  and  as  the  result  all  the  civilized 
Christian  nations  slaughter  their  enemies  by 
the  hundred  thousands.  But  Mohammedanism 
has  taught,  "Help  your  friends  and  kill  your 
enemies,"  and  so  the  Mohammedan  honestly 
practises  his  religious  belief,  while  it  requires  a 
very  highly  developed  state  of  hypocrisy  for 
the  Christian  nations  to  harmonize  their  actions 
with  their  professed  religion. 

Japan,  in  the  Far  East,  while  a  party  to  the 
world's  war,  is  really  outside  of  it.  Looking 
only  after  her  own  interest,  she  is  writing  the 
Monroe  Doctrine  of  Asia  into  the  book  of  his- 
tory: "Asia  for  the  Asiatics."     In  the  Chinese 

100 


OTHER  EUROPEAN  NATIONS 

war  of  1894  she  acquired  the  leadership  of  the 
yellow  race;  but  the  European  nations  de- 
prived her  of  the  fruit  of  victory,  and  divided 
between  themselves  the  territories  which  Japan 
had  conquered.  Japan  had  to  bide  her  time. 
In  the  Boxer  revolution  she  took  a  leading  part 
in  the  punitive  expedition  and  so  deprived  it 
of  any  racial  significance.  When  the  time  was 
ripe  Japan  struck  Russia,  deprived  her  of  the 
spoils  taken  in  1894,  and  ended  the  dream  of 
Russia's  Pacific  empire.  Another  ten  years,  and 
Germany  felt  Japan's  retaliation  and  had  to 
abandon  her  spoils.  But  England  also  had 
profited  from  Japan's  coercion  in  1894,  and  it 
is  significant  that  Japan  has  taken  not  only 
the  German  possessions  in  China,  but  also  the 
German  islands  in  the  Pacific,  and  is  holding 
them  as  "strategic  positions."  Against  whom? 
Not  against  Germany;  but  they  are  strategic 
positions  against  England's  colonies. 

We,  as  Americans,  may  desire  the  "open 
door"  in  China,  but  as  believers  in  the  Monroe 
Doctrine — "America  for  the  Americans" — we 
cannot  honestly  dispute  Japan's  "Asia  for  the 
Asiatics,"  if  Japan  is  capable  of  making  good 
in  civilization.  And  there  is  no  doubt  about 
this,  for  the  yellow  race  is  the  only  one  which 

101 


AMERICA  AND  THE  NEW  EPOCH 

has  been  capable  of  disputing  with  the  white 
race  the  leadership  in  civilization,  and,  indeed, 
has  held  the  leadership  in  some  periods  in  the 
world's  history.  Thus  there  will  be  a  gradual 
coalition  of  Japan  with  her  defeated  enemies, 
Russia  and  Germany,  in  her  preparation  to 
drive  England  out  of  the  Far  East. 

It  is  necessary  to  shortly  discuss  the  situation 
of  the  various  nations  to  understand  their  align- 
ment in  the  world's  war  and  to  realize  the  com- 
plexity of  the  issues:  while  primarily  it  is  the 
inevitable  conflict  between  the  old  and  the  new 
era,  between  England  and  Germany,  all  the 
issues  between  the  nations,  which  lay  slumber- 
ing, have  flared  up  and  are  being  fought  out, 
such  as  Russia's  aim  for  Constantinople,  Po- 
land's restoration,  the  desire  of  the  Balkan  na- 
tions to  safeguard  their  national  independence, 
etc.,  and  these  secondary  issues  necessarily  more 
or  less  modified  and  controlled  the  conduct  and 
the  theater  of  the  war,  and  so  tended  to  obscure 
the  main  issue. 


VIII 

AMERICA   IN  THE  PAST 

THE  history  of  American  colonization  can 
be  divided  into  three  periods,  of  which  the 
latter  two  largely  overlap;  the  period  of  ex- 
ploitation, the  period  of  the  classic  civilization 
of  the  South,  and  the  period  of  the  individual- 
istic civilization  of  the  North. 

For  centuries  after  the  discovery  of  America 
the  new  continent  was  a  field  of  forcible  exploit- 
ation, but  no  serious  attempts  at  settlement  and 
organization  of  new  communities  were  made. 

The  European  nations,  Spaniards,  Portu- 
guese, etc.,  attracted  by  the  treasures  of  gold 
and  silver,  came  to  plunder,  but  not  to  settle 
and  stay;  few  remained,  and  the  white  popu- 
lation thus  grew  very  slowly — and  even  then 
strongly  intermixed  with  the  native  Indian 
population. 

The  gold  and  silver  fleets  carried  the  loot  of 
the  new  continent,  gathered  by  murder  and 

103 


AMERICA  AND  THE  NEW  EPOCH 

rapine,  to  Europe,  to  the  disaster  of  the  exploit- 
ing nations.  Spain  and  Portugal,  becoming  par- 
asites by  the  spoils  of  America,  followed  the 
fate  of  the  Roman  Empire,  decayed  and  fell 
from  their  height.  When  the  plunder  ended 
these  nations  had  ceased  to  be  self-supporting; 
poverty  thus  overtook  them,  and  only  to-day, 
after  centuries,  are  they  beginning  to  recover. 

The  new  continent  was  despoiled,  no  construc- 
tive work  was  done,  no  new  nations  were  created, 
and  when  finally  the  period  of  exploitation  came 
to  an  end,  and  the  Spanish-American  countries 
rose  and  gained  their  liberty  in  the  beginning 
of  the  eighteenth  century,  it  was  to  exchange 
exploitation  for  anarchy;  there  was  nothing  on 
which  to  build  a  stable  self-governing  nation, 
and  revolution  followed  revolution,  until  finally 
a  few  fairly  stable  governments  emerged — Ar- 
gentine, Brazil,  Chile,  Mexico.  And  even  these 
governments  are  not  very  stJible;  impoverished 
by  their  forcible  exploitation  of  their  European 
masters  in  former  times,  they  largely  had  to 
depend  on  foreign  capital  for  their  development, 
and  what  this  means  we  see  in  the  Mexico  of 
to-day;  development  by  foreign  capital  means 
development  for  foreigners,  but  exploitation  of 

the  nation,  and  if  the  country  is  not  unusually 

104 


AMERICA  IN  THE  PAST 

rich,  its  population  unusually  capable — as  was 
the  case  in  the  United  States — or  other  for- 
tunate circumstances  intervene  and  change  the 
trend  of  development,  sooner  or  later  a  reaction 
sets  in,  a  revolution  against  foreign  exploitation, 
and  then  it  is  doubtful  whether  a  stable  govern- 
ment of  the  natives  for  their  own  interests  will 
ultimately  arise,  or  whether  anarchism  will  end 
the  nation  as  an  independent  unit,  as  seems  to 
be  now  the  fate  of  Mexico. 

Here  probably  the  European  war  may  be  a 
godsend,  may  be  the  saving  of  the  smaller  na- 
tions of  this  hemisphere;  the  vast  destruction 
of  European  capital  by  the  world's  war  forced 
the  extensive  withdrawal  of  foreign  capital  from 
the  South  American  nations.  The  jBrst  effect, 
naturally,  was  wide-spread  disaster;  industry, 
trade,  and  agriculture  suffered;  but  the  final 
outcome  may  well  be  a  gradual  rise  of  these 
nations  by  their  own  resources;  very  slowly  in- 
deed, compared  with  the  rapid  advance  possible 
by  foreign  capital,  but  what  is  accomplished  in 
this  manner  is  by  the  nation  and  for  the  benefit 
of  the  nation,  is  constructive  advance  and  not 
destructive  exploitation,  and  here  the  United 
States,  as  the  big  brother  of  these  nations,  who 
has  successfully  passed  the  same  trials,  from 

105 


AMERICA  AND  THE  NEW  EPOCH 

foreign  exploitation  to  industrial  independence, 
may  offer  material  help  and  assistance.  But 
this  will  require  a  great  deal  more  patience  and 
forbearance  than  we  have  usually  shown  in  our 
dealings  with  other  nations. 

In  the  United  States  the  immigration  from 
the  beginning  was  for  colonization.  No  wealth 
of  gold  or  silver  attracted  the  plunderers  of 
Europe,  and  the  northern  shores  of  the  Ameri- 
can continent  thus  were  neglected  long  after 
Central  and  South  America  had  been  over- 
run and  exploited.  But  when  finally  the  colo- 
nization of  the  United  States  began,  it  was  for 
settlement,  and  the  colonists,  driven  to  our 
shores  by  political  and  religious  persecution, 
and  later  by  Europe's  unfavorable  industrial 
and  social  conditions,  came  to  stay,  to  form  a 
new  nation. 

The  Southern  colonics  languished  for  a  long 
time,  the  climate  being  too  hot  for  white  farm 
lal^or.  It  was  the  introduction  of  the  negro 
slave  which  made  Southern  colonization  a  suc- 
cess and  created  tlie  historical  South,  an  agri- 
cultural community  raising  tobacco,  cotton, 
etc.,  on  large  plantations  operated  by  slave 
labor.  Thus  arose  a  civilization  based  on  slave 
labor;    a  small  master  class  in  control  of  all 

106 


AMERICA  IN  THE  PAST 

political,  industrial,  and  social  power,  free  to 
devote  their  time  to  administration,  literature, 
art,  and  science,  highly  civilized  and  superior 
intellectually  to  the  uncouth  farmers  and  sailors 
of  the  Northern  States,  thereby  for  generations 
in  control  of  the  political  government  of  the 
entire  nation.  Below  them  was  a  mass  of 
human  beasts  of  burden,  slave  laborers,  as  a 
rule  well  kept  and  taken  care  of,  just  as,  and 
for  the  same  reason  that,  we  take  care  of  our 
cattle  now,  and  therefore  as  a  rule  not  seriously 
dissatisfied  with  their  lot ;  and  a  number  of  poor 
white  peoi)le,  serving  the  masters  as  overseers, 
helpers,  etc.,  or  drifting  idly  as  "poor  white 
trash."  In  short,  it  was  a  civilization  identical 
in  almost  every  respect  with  the  classic  civiliza- 
tion of  ancient  Greece  and  Rome,  which  after 
twenty  centuries  reappeared  on  this  continent. 
Such  civilization  inherently  is  agricultural,  re- 
lying for  its  industrial  products  on  foreign  trade, 
and  free  trade  thus  was  the  necessary  require- 
ment of  it. 

Entirely  different  was  the  colonization  of  the 
Northern  States,  Small  individual  farmers  and 
traders  settled  in  New  York,  Pennsylvania, 
New  England.  The  climatic  and  agricultural 
conditions  were  unsuitable  for  negro  labor,  and 

107 


AMERICA  AND  THE   NEW  EPOCH 

slavery  thus  never  gained  a  foothold,  but  in- 
dividual freeholders  settled  and  lived  together 
in  small  communities,  eking  out  their  living 
from  the  rather  poor  soil  of  the  Northern  States, 
or  by  hunting  and  trading  with  the  Indians,  or 
sailing  the  oceans. 

It  is  in  these  communities  of  the  early  colo- 
nial days  in  the  Northern  States,  that  our  pres- 
ent American  Government  originated  with  its 
great  fundamental  democratic  principle  that 
*'all  men  are  born  free  and  equal"  and  "that 
"government  can  exist  only  with  the  consent  of 
the  governed."  But  here  also  the  foundation 
was  laid  of  the  terrible  defect  of  our  Govern- 
ment which  has  made  it  a  byword  of  inefficiency 
throughout  the  world — the  "rotation  in  office 
for  the  distribution  of  spoils." 

Historically,  the  nearest  analogy  to  this  early 
colonial  society  of  tlie  pioneer  days  probably 
is  found  in  the  organization  of  the  German 
tribes  in  the  prc-feudal  days,  in  the  later  days 
of  the  Roman  Empire;  an  aristocratic  democ- 
racy, small  communities  of  citizens,  equal  in 
rights  and  freedom,  similar  in  occupation, 
knowledge,  and  experience,  though  differing  in 
their  standing  in  the  community,  tlieir  influ- 
ence and  authority;  very  strongly  individualistic 

108 


AMERICA   IN  THE   PAST 

and  self-reliant;  trained  by  experience  and  ne- 
cessity to  take  care  of  themselves  in  fighting 
against  the  hardship  of  their  existence,  against 
the  barren  soil,  unfriendly  nature,  hostile  Indi- 
ans. Little  help  was  to  be  expected  from  a 
Government  which  was  practically  non-existing; 
locally  the  loosest  kind  of  government,  essen- 
tially a  voluntary  co-operation  with  little  man- 
datory power,  and  far  away  across  the  ocean  a 
central  government  in  the  English  king,  which 
essentially  limited  itself  to  foreign  relations, 
but  took  little  part  in  the  local  issues  of  the 
community,  and  where  the  British  colonial 
governor  attempted  to  govern  the  internal  af- 
fairs of  the  colony  it  usually  was  a  failure  and 
led  to  resentment  and  opi)osition,  and  finally  to 
the  Revolution.  Thus  the  relation  of  the  Amer- 
ican Colonics  to  the  Britisli  king  was  similar  to 
that  of  the  German  tribes  in  the  pre-feudal  days 
to  the  Augustus  in  Rome  as  their  far-distant 
overlord. 

In  the  small  agricultural  community  of  the 
Colonial  days,  consisting  of  citizens  of  similar 
occupation,  character,  and  intelligence,  any 
member  of  the  community  could  carry  out  the 
simple  functions  of  the  Government  about 
eciually  well,  but  the  office  was  a  duty  rather 

109 


AMERICA  AND  THE  NEW  EPOCH 

than  an  lionor,  and  however  little  time  it  de- 
manded, it  would  have  been  unfair  to  ask  the 
same  citizen  to  carry  it  for  many  years. 

Thus  in  those  days  and  under  this  simple 
form  of  social  structure  it  was  natural  that  any 
intelligent  citizen  was  considered  eligible  to  any 
oflBce,  but  that  the  oflSce-holder  changed  at 
every  term. 

Thus  became  ingrained  in  the  American  na- 
tional character  the  conception  that  any  intelli- 
gent citizen  can  fill  any  ojQSce,  and  that  it  is 
desirable  to  change  the  office-holder  at  every 
election. 

While  this  was  feasible  and  worked  satis- 
factorily in  the  simple  colonial  society,  it  has 
become  a  serious  handicap  in  our  present  highly 
complex  civilization.  When  in  rapid  succession 
a  theater-director,  a  physician,  a  minister,  a 
lawyer  are  placed  in  administrative  charge  of  a 
municipality — all  good  men  and  true,  but  none 
of  them  by  i)rofessional  experience  qualified  to 
the  administration  of  the  municipal  corporation 
of  to-day — or  where  a  barber  is  placed  in  charge 
of  the  city  water- works,  a  saloon-keeper  in  the 
administration  of  tlie  public  works,  no  matter 
how  cai)al)le,  honest,  and  intelh'gent  the  men 
may  be,  the  failure  of  any  professional  qualifi- 

110 


AMERICA  IN  THE  FAST 

cation,  the  absence  of  the  knowledge  and  experi- 
ence required  for  the  efficient  administration  of 
the  office  necessarily  must  lead  to  the  incom- 
peLency  and  inefficiency  which  we  see  displayed 
throughout  all  our  political  life;  and  when,  then, 
the  incumbent  in  the  office  is  changed  by  the 
election  or  appointment  of  his  equally  incom- 
petent successor,  just  when  he  begins  to  under- 
stand a  little  of  the  duties  of  his  office,  the  neces- 
sary result  is  the  failure  of  political  government, 
which  is  the  characteristic  of  our  nation. 

This  is  the  bad  inheritance  from  our  early 
Colonial  days,  which  we  shall  have  to  over- 
come to  reap  the  full  benefit  of  the  great  prin- 
ciples created  then  and  later  laid  down  in  the 
Declaration  of  Independence  and  in  the  Con- 
stitution. 

Politically,  the  first  period  in  the  history  of 
our  country  represents  its  consolidation  as  an 
English-speaking  nation:  the  Dutch,  French, 
Spanish,  etc.,  colonies  were  absorbed  or  forced 
into  a  position  where  they  coidd  no  longer 
threaten  the  supremacy  of  the  English  colonies, 
and  wars  between  European  nations  could  no 
longer  be  waged  on  American  battle-fields. 
Hereby  the  American  colonies  were  withdrawn 
from   all    direct   interest   in   the   controversies 

8  111 


AMERICA  AND  THE  NEW   EPOCH 

fought  out  between  European  nations,  and  their 
relations  with  the  "Mother  Country,"  England, 
thus  became  the  predominant  issue.  No  longer 
disturbed  by  the  reflection  of  European  wars,  the 
colonies  grew  in  strength  and  self-confidence, 
and  when  England  failed  to  recognize  their 
claims  to  control  their  own  destiny,  the  Revolu- 
tion was  the  result. 

It  left  the  colonies  independent,  but  as  thir- 
teen separate  nations,  and  the  issue  then  was 
whether  and  how  far  they  should  co-operate. 
They  might  have  remained  independent  and 
separate,  other  nations  formed  on  the  continent, 
and  what  is  now  the  United  States  would  have 
become  a  number  of  separate  and  independent 
nations,  just  as  South  America  is  to-day,  with 
constant  rivalries  and  contentions.  Fortunately 
we  escaped  this;  the  Union  was  formed  by  vol- 
untary co-operation  of  the  thirteen  States,  and 
ever  since  the  progress  toward  closer  co-opera- 
tion and  centralization  of  the  nation  has  gone 
on  steadily. 

However,  as  the  States  had  voluntarily  en- 
tered the  Union,  so,  naturally,  it  might  be  held 
that  they  could  withdraw  again  from  the  Union 
whenever  they  desired.  Thus  when  in  1812, 
during    the    unsuccessful    war    with    England, 


AMERICA   IN  THE   PAST 

delegates  of  the  New  England  States  met  at 
Hartford  and  seriously  discussed  the  advis- 
ability of  again  becoming  British  colonies,  the 
withdrawal  from  the  Union  did  not  appear  such 
treason  as  it  seems  to  us  now.  Even  when,  in 
ISGO,  the  South  lost  control  of  the  national 
Government  and  the  Southern  States  withdrew 
from  the  Union  and  formed  the  Confederation, 
many  people  considered  that  they  had  the  right 
to  do  so  and  recommended  to  let  them  go. 
Fortunately,  better  counsel  prevailed.  Other- 
wise we  would  have  two  nations,  and  in  the 
agricultural  depression  of  1893  the  North  would 
probably  have  split  again  into  an  industrial 
East  and  an  agricultural  West,  and  with  three 
nations  with  different  and  antagonistic  interests 
dividing  the  continent,  America  woidd  have 
been  led  into  the  same  path  which  Europe  fol- 
lowed, with  the  same  result. 

Thus  it  was  Lincoln's  administration  which 
established  forever  the  principle,  "The  Union, 
One  and  Indivisible."  It  was  this  issue  which 
was  fought  out  in  the  Civil  War,  and  the  Civil 
War  thus  created  the  American  Nation,  not  the 
Revolutionary  War;  the  latter  made  the  States 
independent  of  England,  and  thus  separated 
the  development  of  America  from  that  of  Eu- 

113 


AMERICA  AND  THE  NEW  EPOCH 

rope,  but  it  did  not  yet  permanently  settle  the 
character  of  the  American  development,  whether 
it  should  be  that  of  a  stable,  peaceful  nation,  or 
an  equilibrium  of  nations  balancing  on  the 
sword's  point,  like  Europe. 
^  The  development  of  the  South  as  a  stable, 
civilized  community  antedates  that  of  the 
North,  and  during  the  period  from  the  Revo- 
lutionary War  to  the  Civil  War,  the  South 
governed  the  Union.  However,  the  classic  or- 
ganization of  the  South  was  that  of  a  low  pop- 
ulation density,  while  the  individualistic  soci- 
ety of  the  North  is  capable  of  far  greater  pop- 
ulation density,  with  its  numerous  small  farms 
operated  by  citizens  instead  of  the  few  large 
plantations  operated  by  slave  labor  found  in 
the  South. 

But  the  New  England  farms,  never  very  fer- 
tile, became  more  and  more  exhausted,  hunting 
ceased  with  the  disappearance  of  the  game,  the 
Indian  trade  vanished  with  the  Indian,  and 
when  the  population  penetrated  farther  into 
the  interior  of  the  country,  the  ocean-carrying 
trade  contributed  less  to  the  support  of  the 
nation.  Thus  industrial  development  appeared 
the  only  saving  of  the  steadily  increasing  popu- 
lation, and  the  numerous  small  water-powers 

lit 


AMERICA   IN  THE   PAST 

along  New  England's  mill-streams  invited.  But 
there  could  be  no  successful  development  of 
industries  in  competition  with  England's  es- 
tablished superior  industrial  power,  without 
protection  of  the  new  industries  by  tariff  laws. 

But  the  agricultural  South  required  free  trade 
for  the  exchange  of  its  crops  against  England's 
industrial  products. 

Thus  the  issues  were  joined  between  the 
free  trade  demanded  by  the  South  and  the  pro- 
tective tariff  required  to  raise  the  industries 
needed  for  the  support  of  the  North. 

The  South  controlled  the  Government,  but 
the  North  was  growing  more  rapidly  in  popu- 
lation, and  all  efforts  of  the  Southern  states- 
men politically  in  charge  of  the  nation  could 
not  forever  postpone  the  day  when  the  North 
got  control  of  the  Government,  with  Lincoln's 
election. 

The  emancipation  of  the  slaves  broke  the 
power  of  the  South  by  destroying  its  labor,  and 
the  South  was  ruined,  the  classic  period  of  our 
civilization  ended,  and  the  individualistic  era  of 
industrial  capitalism  ruled  supreme  on  this 
continent. 

For  many  years  the  South  was  conquered 
territory,   received   the   treatment   which   now 

115 


AMElllCA  AND  THE  NEW  EPOCH 

the  conquered  nations— Belgium,  Servia,  Egypt 
— receive,  while  the  North,  protected  against 
England's  competition,  and  with  the  vast  ter- 
ritories of  the  West  and  the  South  as  assured 
markets,  rapidly  developed  its  industries. 

For  a  generation  the  South  was  suffering  in 
poverty,  then,  in  the  90's,  came  the  beginning 
of  the  new  South  and  the  decadence  of  the  New 
England  States. 

The  industries  had  advanced  to  such  manu- 
facturing units  that  the  small  mill-streams  of 
New  England  did  not  satisfy  the  power  require- 
ments any  more,  while  the  numerous  large 
rivers  of  the  South  offered  abundant  power. 
Electrical  engineering  had  advanced  far  enough 
to  make  the  place  of  the  power  consumption 
independent  of  the  source  of  power,  by  long- 
distance transmission,  and  the  same  economic 
laws  which  had  taken  the  cotton  industry  from 
England  and  transferred  it  to  New  England,  as 
nearer  to  the  source  of  supply  of  raw  materials 
and  of  denuind  for  the  finished  products,  these 
same  laws  now  began  to  withdraw  the  cotton 
industries  from  New  England  and  locate  it  in 
the  Southern  States  witliin  the  cotton-fields, 
and  the  New  England  mills  began  to  languish, 
the  Southern  colLou-mills  increased  and  nudti- 

IIG 


AMERICA   IN  THE   PAST 

plied.  In  1894  tlie  first  electrically  driven 
cotton-mill  in  the  South  started  at  Columbia, 
N.  C,  built  with  Northern  capital.  The  next 
year  the  Peltzer  Mill,  owned  by  Southern  capi- 
tal, started  electrical  operation,  and  since  that 
time  the  South  has  rapidly  become  an  indus- 
trial country,  like  the  North  a  generation  ago; 
cheaper  power,  better  and  cheaper  raw  mate- 
rials, cheaper  living  conditions  in  the  Southern 
climate,  gave  all  the  advantage  to  the  South, 
while  New  England  had  to  find  its  saving  by 
the  increasing  emigration  of  its  population  to 
the  middle  West  and  the  far  West  of  our 
country,  and  New  England's  farms  are  standing 
abandoned. 

The  antagonism  of  interests  between  the 
South  and  the  North,  which  caused  the  Civil 
War,  thus  has  vanished  before  the  industrial 
development  of  tlie  South,  made  possible  by 
electrical  power,  and  the  only  differences  still 
remaining  are  those  due  to  the  later  industrial 
development  of  the  South,  which  thus  far  has 
failed  to  protect  its  labor  supply  by  adequate 
educational  laws,  and  laws  against  the  exploita- 
tion of  child  labor  and  women  labor.  These  are 
now  the  issues,  and  .ire  the  black  marks  against 

the  present   South — illiteracy,   exploitation   of 

117 


AMERICA  AND  THE  NEW  EPOCH 

children  and  of  women.  Just  as  the  industries 
of  the  North  prosper  in  spite  of  the  withdrawal 
of  the  children  for  education,  and  the  limitation 
of  their  exploitation,  under  the  still  more  favor- 
able conditions  of  the  South  the  same  will  be 
the  case. 


IX 

AMERICA   IN  THE  INDIVIDUALISTIC  ERA 

DURING  the  Civil  War,  when  industrial 
capitalism  extended  its  sway  over  the  en- 
tire United  States,  and  in  the  years  following 
the  war  we  were  in  the  first  period  of  the  indi- 
vidualistic era,  that  of  numerous  small  and 
independent  producers,  all  more  or  less  success- 
ful, due  to  the  still  almost  untouched  resources 
of  the  new  continent.  Then  we  had  a  large, 
prosperous  middle  class,  and  little  diflSculty  ex- 
isted for  any  man  with  a  fair  amount  of  intelli- 
gence and  ambition  to  rise  to  independence. 
These  were  the  golden  days,  to  which  our  in- 
dividualists hark  back,  which  our  legislatures 
and  governments  attempt  to  restore  by  legal 
enactments.  But  the  world  does  not  stand 
still,  for  standstill  is  death;  in  free  competition, 
the  more  successful  producers  destroyed  the  less 
successful  ones;  companies  and  corporations 
formed  and  absorbed  or  defeated  the  individual 

119 


AMERICA  AND  THE  NEW  EPOCH 

producers,  the  Larger  corporations  absorbed  or 
vanquished  the  smaller  ones,  combined  with 
each  other  in  still  larger  ones,  and  so,  by  the 
working  of  inexorable  economic  laws,  the  con- 
solidation of  the  industries  progressed  from 
numerous  small  producers  to  the  formation  of 
huge  corporations,  w^ith  competition  steadily 
growing  more  strenuous,  more  intense,  and  more 
destructive. 

Finally,  in  the  90's  the  end  was  reached; 
especially  in  those  industries  which  had  been 
organized  into  a  few  large  corporations.  The 
necessity  of  keeping  the  factories  going,  with 
the  steadily  increasing  excess  of  productive 
capacity  over  the  demand  for  the  products,  had 
made  competition  so  vicious  that  it  threatened 
with  destruction  the  victor  as  well  as  the  van- 
quished, in  a  universal  v.Tcck  of  the  industry. 

Thus  co-operation  had  to  come,  of  neces- 
sity, to  avoid  the  destructive  effects  of  com- 
petition. 

Thus  co-operative  agreements  between  for- 
merly competing  corporations  came,  and  the 
individualistic  era  seemed  to  approach  its  end, 
the  co-operative  era  to  arrive. 

The  fundamental  jirinciple  of  industrial  co- 
operation between  corporations  in  the  same  or 

120 


AMERICA  IN  THE  INDIVIDUALISTIC  ERA 

similar  fields  comprise  control  of  production; 
control   of  prices;    interchange   of  information. 

Control  of  production  7neans:  Elimination  of 
the  constantly  recurring  periods  of  business 
depression  and  business  boom,  by  restricting 
excessive  production  in  boom  times,  and  main- 
taining production  in  times  of  impaired  busi- 
ness confidence  by  manufacture  for  stock,  by 
encouraging  consumption  by  means  of  long- 
extended  credits,  acceptance  of  stock  in  pay- 
ment, financial  assistance  for  starting  new  en- 
terprises and  extending  existing  ones,  etc. 

Elimination  of  unrestricted  competition  is 
accomplished  by  dividing  the  production  be- 
tween the  corporations  in  a  definite  percentage 
based  on  their  previous  business,  or  their  capi- 
talization, or  their  producing  facilities;  or  by 
dividing  the  business  territorially,  or  by  divid- 
ing it  by  the  character  of  the  manufactured 
products,  etc. 

Control  of  prices  means:  Agreement  on  the 
same  prices  by  all  producers,  either  by  definitely 
fixing  such  prices,  where  such  is  possible,  with 
periodic  readjustment;  or  by  an  agreement  on 
the  methods  of  computing  selling  prices  from 
the  individual  items  of  the  cost  of  production, 
etc. 

121 


AMERICA  AND  THE  NEW   EPOCH 

Agreement  on  the  legitimate  profits  of  the 
middlemen,  by  fixing  the  retail  prices,  etc. 

Interchange  of  information  includes:  Inter- 
change of  technical  information  and  experience 
between  manufacturing  and  technical  staffs, 
joint  use  and  interchange  of  patent  rights, 
trade-marks,  etc. 

Mutual  consultation  on  administrative  prob- 
lems, commercial  and  financial  questions,  etc. 

Mutual  holdings  of  stock  of  the  corporations, 
interlocking  directorates,  etc. 

Practically  all  these  necessary  requirements 
for  safely  guiding  our  industrial  prosperity  from 
the  competitive  age,  which  has  failed  and  is 
dead,  into  the  coming  co-operative  age,  have 
been  outlawed  by  our  Government. 

The  result  is  that  from  the  beginning  of  this 
century,  when  the  corporate  development  of 
industry  was  arrested  by  the  interference  of  the 
Government,  instigated  by  a  misguided  public 
demand,  our  industrial  development  has  not 
progressed,  but  lapsed  back;  the  industries 
have  grown  larger,  the  corporations  financially 
more  powerful,  but  as  an  industrial  nation  we 
have  gone  backward  with  increasing  rapidity. 
Competition  has  not  been  restored;  no  polit- 
ical law  can  resurrect  a  corpse,  and  while  you 


AMERICA  IN  THE  INDIVIDUALISTIC  ERA 

can  forbid  co-operation  by  legislation,  you  can- 
not by  law  order  people  or  corporations  to 
commit  suicide. 

The  result  thus  has  been  increasing  dis- 
organization, interference,  inefficiency,  and 
waste,  leading  to  an  industrial  chaos  just  as 
regrettable  for  our  national  welfare  as  un- 
necessary. 

What  were  the  causes  for  this  forcible  arrest 
of  the  natural  industrial  development  of  our 
nation,  which  threatens  its  future  welfare,  nay, 
even  its  existence.'^ 

"While  in  other  nations  the  industrial  devel- 
opment was  fairly  uniform  throughout  the  na- 
tion, in  our  nation  the  development  in  the 
Eastern  States  was  about  a  generation  ahead 
of  that  in  the  middle  West  and  the  West.  Thus, 
when  in  the  East  the  corporate  organization  ap- 
proached the  co-operative  stage  there  was  still 
a  large  class  of  small,  individual  producers  in 
the  West  who  felt  their  existence  threatened  by 
the  rise  of  corporate  industrial  power,  and  were 
ready  to  fight  the  corporation  by  all  means,  po- 
litical and  otherwise,  in  the  vain  attempt  to 
avoid  the  inevitable,  the  extinction  of  the  small 
producer  before  the  higher  efficiency  of  organ- 
ized  corporate   production.     Add   thereto  the 

123 


AMERICA  AND  THE  NEW  EPOCH 

not  negligible  independent  middle  class,  which 
still  exists  in  the  East,  and  all  those  who  have 
tried  and  failed,  and  therefore  naturally  hate 
those  who  have  succeeded  in  organizing  big 
production,  and  we  §et  a  formidable  political 
power;  but,  however  much  we  may  sympathize 
with  the  individual  who  desires  to  preserve  his 
industrial  independence,  it  is  a  reactionary 
movement,  however  progressive  some  of  its 
leaders  may  call  themselves,  and  either  the  re- 
actionary forces  must  be  overcome  by  educa- 
tion and  otherwise,  or  the  nation's  progress  is 
threatened. 

•An  equally  serious  enemy  to  the  progress 
toward  co-operation  is  the  strong  individualistic 
temperament  of  a  large  part  of  the  American 
citizens,  especially  those  who  come  from  Anglo- 
Saxon  descent;  the  attitude  of  mind  which 
rather  wishes  to  be  the  first  in  a  small  puddle 
than  the  second  in  the  wide  ocean;  tempera- 
ments who  prefer  to  be  president  of  a  ten- 
thousand-dollar  business  rather  than  assistant 
to  the  president  of  a  hundred-million-dollar 
corporation.  We  must  also  consider  that  many 
of  the  organizers  and  corporation  leaders  are 
pronounced  individualists,  do  not  understand 
what  they   arc  doing  and   whereto  the  path 

124 


AP^lEllICA  IN  THE  INDIVIDUALISTIC  ERA 

leads  into  which  economic  laws  forced  them,  and 
thus  leadership  in  the  transition  from  competi- 
tion to  co-operation  by  men  understanding  the 
industrial  situation  and  its  needs  has  often  been 
lacking. 

Then  there  was  antagonism  of  the  labor  inter- 
ests, unjustified  and  illogical,  indeed,  since  all 
labor  organizations  are  based  on  the  principle  of 
co-operation.  However,  they  feared  the  greater 
power  of  organized  industrial  capital  and  point 
to  powerful  corporations  who  have  kept  union- 
ism out  of  their  works.  And  in  the  days  when 
this  popular  resentment  against  corporate  or- 
ganization originated,  there  were  some  indus- 
trial controversies  fought  to  a  finish  by  the 
corporations,  to  the  suppression  of  the  labor 
organizations,  possibly  beyond  the  point  where 
social  wisdom  should  have  called  a  halt  in  the 
interest  of  future  co-operation  and  friendly  feel- 
ing with  the  masses  of  the  people. 

One  of  the  most  serious  causes  of  the  rise  of 
popular  resentment  against  the  corporations 
was  the  character  of  the  corporation  itself,  es- 
pecially in  the  early  days,  its  crudeness  and 
inefficiency,  which  in  many  cases  led  to  a  failure 
of  realizing  the  advantage  expected  from  co- 
operation.   There  is  no  constructive  supervisory 

U5 


AMERICA  AND   THE  NEW  EPOCH 

power,  in  our  country,  as  was  represented  by  the 
central  Govermncnt  in  Germany;  our  Govern- 
ments, from  the  federal  down  to  the  municipal, 
are  not  organized  for  constructive  activity,  and 
thus  their  entrance  in  the  field  is  largely  inhibi- 
tory, liable  to  disorganize  by  interference.  The 
tariff  wall  excluded  the  check  afforded  by  com- 
petition with  other  nations.  Thus  over-capi- 
talization was  frequent,  and  seriously  handi- 
capped some  corporations  for  years,  until  their 
business  had  grown  up  to  their  capitalization. 
Sometimes  the  over-capitalization  was  inten- 
tional; water,  or  the  result  of  excessive  organi- 
zation charges;  but  the  most  frequent  and  most 
serious,  because  unavoidable,  cause  was  the 
necessarily  excessive  cost  of  absorbing  smaller 
competitors;  the  price  usually  is  not  the  value 
of  the  competitor's  business;  often  this  is  nil — 
but  is  based  on  the  harm  which  the  competitor 
could  do  in  unrestrained  competition,  before  it 
is  destroyed.  Thus  millions  have  been  paid 
for  competitors  which  brought  in  practically  no 
assets,  and  still  it  was  a  good  bargain,  since  still 
more  millions  would  have  been  lost  in  fighting 
the  competitor. 

Occasionally  even  competing  comi)anics  have 
been  organized,  not  for  honest  industrial  pro- 

126 


AMERICA  IN  THE  INDIVIDUALISTIC  ERA 

duciion,  but  for  forcing  an  established  corpora- 
tion to  buy  it  out — a  kind  of  blackmail  against 
which  no  protection  existed. 

Thus  the  industrial  consolidation  was  accom- 
plished at  heavy  sacrifice  in  capital,  and  corre- 
sponding sacrifice  in  economic  efficiency.  An- 
other incident  in  causing  public  hostility  was 
the  wreckers — those  financiers  who  organized  or 
got  control  of  corporations,  not  for  industrial 
production,  but  to  get  quickly  as  much  out  of 
them  as  possible,  and  then  abandon  them, 
squeezed  out  and  wrecked.  Some  names  of  the 
previous  generation  are  still  remembered. 

A  most  serious  cause  of  the  popular  antago- 
nism was  the  failure  of  the  corporation  in  one 
of  its  most  important  activities,  that  of  the 
social  relations  to  its  employees  and  to  the 
public  at  large.  In  those  early  days  the  leaders 
and  organizers  of  corporate  production  were  al- 
together too  much  inclined  to  consider  the  cor- 
poration as  their  own  private  property,  and  felt 
that  paying  such  wages  as  they  had  to  pay  to 
get  efficient  workers  comprised  all  their  rela- 
tions to  the  em])loyees,  and  that  toward  the 
general  public  they  had  no  obligations  at  all. 
But  while  against  the  individual  small  employer 
of  Lincoln's  days  the  individual  employee  or 

9  127 


AMERICA  AND  THE  NEW  EPOCH 

the  public  could  help  themselves,  they  became 
helpless  against  the  corporate  power  of  organized 
industry. 

The  first  time  this  was  forcibly  impressed 
upon  the  public  by  the  great  anthracite-coal 
strike,  when  miners  and  mine-owners  could  not 
agree,  and  as  the  result  the  people  of  New 
England  suffered,  their  children  died  from  ex- 
posure, until  finally  the  Federal  Government 
had  to  interfere  in  the  "private  relations"  be- 
tween employer  and  employee,  in  the  interest 
of  public  welfare.  The  change  brought  about 
by  the  corporate  development,  in  the  power 
relation  between  the  individual  employee  or 
the  general  public  and  the  industrial  employer, 
necessarily  placed  upon  the  corporation  the 
duty  to  establish  an  efficient  equivalent  for  the 
self-help  of  the  individual.  This  is  now  gradu- 
ally being  recognized  by  the  corporations,  and 
more  and  more  the  social  (and  educational,  as 
part  thereof)  relations  with  the  employees  and 
the  general  public  have  become  a  recognized  part 
of  corporation  activity.  But  it  took  a  long  time 
for  the  corporations  to  realize  it,  and  great  harm 
had  been  done  in  the  mean  time  to  the  relation 
between  corporation  and  pul)llc. 

It  is  in  this  direction  that  we  must  hope  for 

128 


AMERICA  IN  THE  INDIVIDUALISTIC  ERA 

the  bringing  about  of  a  better  understanding 
between  corporate  industrial  organization  and 
the  general  public. 

To  a  rapidly  increasing  extent  the  industrial 
corporations  thus  realize  their  social  duties, 
perceive  that  the  establishment  and  preserva- 
tion of  harmonious  social  relations  between  the 
industrial  corporation  and  the  public,  including 
its  employees,  is  an  essential  and  important 
part  of  corporation  activity.  Nevertheless,  in 
most  corporations  this  activity  is  still  very  far 
from  what  it  must  be  to  restore  industrial  peace. 
We  need  only  to  look  at  the  names  of  the  men 
who  are  in  charge  of  the  social  activities  of  even 
very  progressive  corporations,  and  we  cannot 
fail  to  realize  that  very  often  they  q,re  not  the 
same  class  of  men,  not  of  the  same  caliber,  as 
the  men  in  charge  of  the  technical,  the  admin- 
istrative, and  the  financial  activities  of  the 
corporation. 

However,  there  is  a  rapid  progress  noticeable 
in  this  direction. 

All  this  makes  us  realize  that  the  present 
wide-spread  hostility  against  corporations  is  not 
the  work  of  irresponsible  demagogues,  but  is 
the  result  of  causes,  deep-seated  in  our  national 
and  industrial  development,  and  therefore  re- 

129 


AMERICA  AND  THE  NEW  EPOCH 

quires  the  fullest  attention  of  industry's  most 
competent  and  able  leaders. 

The  powerful,  co-operating  group  of  corpora- 
tions, controlling  an  industry  or  a  group  of  in- 
dustries, if  in  the  control  of  irresponsible  men 
for  selfish  purposes,  is  a  far  more  dangerous 
menace  to  the  public  than  were  the  isolated 
small  producers  of  bygone  days;  but  so  is  a 
sharp-edged  tool  far  more  dangerous  in  the 
hand  of  the  vicious  or  criminal  than  a  dull  one, 
and  still  nobody  but  a  fool  would  dull  his  tools 
when  he  desires  to  accomplish  results.  But  this 
is  exactly  what  we  as  a  nation  have  been  doing 
steadily  during  the  last  eight  years:  we  at- 
tempt to  destroy  by  legislation  modern  indus- 
try's most  efficient  tool,  outlaw  all  the  actions 
which  are  necessary  for  industrial  efficiency,  and 
gradually  get  into  the  hysterical  state  where  we 
begin  to  consider  mere  bigness  and  efficiency  as 
criminal. 

In  the  mean  time  the  old  world  has  gone  to 
pieces  in  Europe,  and  a  new  one,  an  era  of  co- 
operation, begins  to  rise  from  the  ruins.  Ger- 
many already  has  organized  its  industries  co- 
operatively, has  encouraged  and  almost  enforced 
by  governmental  acts  all  those  co-operative 
activities  of  corporations  which  we  have  out- 

130 


AMERICA  IN  THE  INDIVIDUALISTIC  ERA 

lawed,  and  an  industrial  eflSciency  resulted 
which  became  a  menace  to  the  individualistic 
nations  and  led  to  the  war,  as  discussed  before. 
England  is  reorganizing  co-operatively  its  in- 
dustrial and  financial  system,  apparently  un- 
noticed and  unobserved  by  us,  at  least  in  its 
significance,  and  is  progressing  in  it  at  a  rate  of 
which  we  do  not  dream,  and  against  the  new 
Europe,  as  it  will  emerge  from  the  war,  our  na- 
tion, with  its  present  suicidal  policy  of  industrial 
self-destruction,  will  be  hopelessly  outclassed. 

This  is  the  real  danger  which  the  European 
war  threatens  to  us — not  a  foreign  invasion — 
quite  likely  this  is  the  last  great  military  war 
the  world  will  ever  see,  but  an  industrial  war, 
and  the  destruction  of  a  continent,  our  own 
America,  by  the  high  economic  efficiency  of  the 
co-operative  industrial  organization  of  the  na- 
tions tried  in  the  fire  of  the  European  war — 
unless  we  awake  in  time,  and  prepare — not 
battle-ships  and  armies,  however  useful  they 
may  be  in  their  lunited  sphere,  but  friendly  re- 
lations based  on  the  recognition  of  their  inter- 
ests, between  all  really  progressive  elements  of 
society,  finding  their  expression  in  legislation 
that  will  advance  instead  of  retard  industrial 
co-operation. 


PUBLIC  AND   PRIVATE   CORPORATIONS 

OUR  governments,  as  now  constituted,  are 
not  adapted  for  eflScient  constructive 
work.  The  smaller  the  governmental  organi- 
zation and  the  more,  therefore,  there  is  an  op- 
portunity for  constructive  work,  in  a  democratic 
nation,  the  more  this  is  evident.  Much  efficient 
constructive  work  has  been  done  by  the  Federal 
Government;  the  Panama  Canal,  the  reclama- 
tion work,  our  Army  and  Navy,  as  far  as  they 
have  been  left  free  from  civilian — that  is,  politi- 
cal— interference.  Some  constructive  work  also 
has  been  done  by  States,  but  it  rarely  has  been 
characterized  by  economic  efficiency;  compare 
the  building  of  the  New  York  State  Barge 
Canal  with  that  of  the  Panama  Canal.  In  the 
smallest  political  organization  —  municipality, 
township,  or  village — inefficiency,  waste,  and 
incompetency  have  been  customary,  except 
in  those  rare  cases  where  one  strong  man  got 

132 


PUBLIC  AND   PRIVATE  CORPORATIONS 

control  and  remained  in  control  for  a  sufficiently 
long  time  to  accomplish  results;  but  then  it  was 
not  democracy,  but  Ca^sarism,  or  "bossism,"  as 
we  call  it,  which  scored. 

The  reason  which  is  usually  given  for  the  in- 
efficiency of  our  municipal  governments  is  their 
control  by  politicians,  the  control  of  the  elec- 
tions by  the  political  party  machines,  and  a 
strong  and  increasing  sentiment  has  arisen 
among  the  better  class  of  citizens,  toward  im- 
proving the  efficiency  of  the  municipal  govern- 
ment, by  change  of  the  form  of  government. 
Various  forms  of  such  reform  government  have 
been  devised,  as  "commission  government," 
"city  manager  government,"  etc. 

The  general  characteristics  of  these  reform 
governments  are: 

A  longer  term  of  office,  five  or  even  seven 
years  instead  of  the  two  years'  term  now  cus- 
tomary in  most  municipalities. 

Elimination  of  the  periodic  complete  change 
of  the  government;  at  every  election  only  a 
part  of  the  officers  is  changed,  and  a  greater 
continuity  of  the  administrative  body  is  thus 
secured. 

Much  greater  power,  authority,  and  respon- 
sibility of  the  officers. 

133 


AMERICA  AND  THE  NEW  EPOCH 

A  small  number  of  elective  officials. 

Election  by  persons,  without  recognition  of 
political  parties. 

Elimination  of  district  representation  by 
choosing  all  officers  by  election  from  the  com- 
munity at  large. 

Referendum  and  recall. 

The  last  feature,  however,  is  objected  to  by 
many  conservative  citizens,  as  dangerously 
radical,  and  thus  not  included  in  many  com- 
mission governments. 

The  experience  was  that  such  commission 
governments,  when  introduced,  almost  always 
were  successful  in  the  opinion  of  the  leading 
citizens,  gave  a  great  increase  in  economy  and 
efficiency  of  the  municipal  government,  an  ab- 
sence of  control  by  political  bosses  and  party 
machines;  in  short,  were  a  great  step  in  ad- 
vance. 

But  now  many  of  these  commission  govern- 
ments have  been  in  existence  for  a  considerable 
number  of  years,  and  from  these  reports  come 
in  which  are  not  always  favorable,  and  claims 
have  been  made  regarding  some  commission 
governments  that  they  are  more  inefficient  and 
unsatisfactory  than  the  political  government 
which  they  replaced,  and  some  communities  have 

134 


PUBLIC  AND  PRIVATE  CORPORATIONS 

abandoned  commission  government  and  gone 
back  to  the  old  form  of  government. 

The  question  then  arises  whether  the  economic 
success  of  the  change  from  political  to  commis- 
sion government  was  really  due  to  the  form  of 
the  new  government,  or  whether  it  was  merely 
the  result  of  the  change  which  disorganized  the 
forces  that  made  for  ineflSciency  and  waste. 
Gradually  during  the  years  these  forces  adapted 
themselves  to  the  new  form  of  government,  got 
control  of  it,  and  it  became  just  as  bad  as  the 
previous  form,  or  even  worse,  due  to  the  greater 
power  of  the  officials  and  their  longer  term  of 
office,  which  increased  their  irresponsibility. 

Municipal  government  by  party  machines 
controlled  by  irresponsible  political  bosses  is 
bad;  but  it  is  a  rather  significant  fact  that 
where  the  citizens  "rose  in  their  might  and 
turned  the  rascals  out,"  and  elected  a  reform 
government,  fusion  government,  citizens  ticket, 
etc.,  such  government  often  has  been  worse 
than  the  "corrupt"  political  government  which 
it  replaced,  and  incompetency,  political  and  so- 
cial inexperience,  and  reformatory  hobbies  have 
resulted  in  still  greater  inefficiency  and  waste. 

It  is  interesting  to  note  that  our  coimtry's 
greatest  city  has  for  a  century  been  controlled 

135 


AMERICA  AND  THE  NEW  EPOCH 

by  the  same  irresponsible  and  "  corrupt "  political 
organization,  and  however  often  reform  move- 
ments have  wrested  the  power  from  the  hands 
of  Tammany  Hall,  it  has  always  come  back, 
and  often  with  such  an  avalanche  as  to  leave 
no  doubt  of  the  failure  of  the  reform  government. 

There  may  be  some  reason  in  this;  the  polit- 
ical boss  desires  to  remain  in  power,  the  political 
machine  expects  to  be  in  existence  and  retain 
its  control  for  generations,  and  this  means  some 
responsibility,  however  indirect.  It  imposes  a 
control  and  limitation  in  the  abuse  of  power, 
which  does  not  exist  with  the  individual  re- 
former who  is  not  restrained  by  any  responsible 
power  from  carrying  out  his  ideas,  whatever 
they  may  be.  It  again  is  significant  that  where 
fusion  administrations  by  several  parties  have 
won  elections,  almost  always  every  one  of  the 
"fused"  parties  have  disclaimed  responsibility 
for  the  elected  officials. 

The  great  trouble  with  political  reform  is 
that  it  is  rarely  based  on  successful  practical 
experience,  but  rather  represents  the  academic 
reasoning  of  well-meaning,  but  often  rather  in- 
experienced and  impractical,  dreamers. 

The  logical  and,  therefore,  most  promising, 
and,  at  the  same  time;,  most  natural  method  of 

136 


rUBLIC  AND  PRIVATE  CORrORATIONS 

remedying  unsatisfactory  results,  is  to  look 
around  where  the  same  or  similar  conditions 
exist,  but  the  results  are  satisfactory,  and  then 
apply,  or  adapt,  the  methods  which  have  given 
satisfactory  results,  to  the  conditions  where  the 
results  have  been  unsatisfactory.  It  is  strange 
that  in  all  the  agitation  for  improving  the  ef- 
ficiency of  the  municipal  corporation,  in  all  the 
studies  of  commission  government,  municipal 
charters,  etc.,  very  little  thought  has  been  given 
to  those  forms  of  government  which  have  proven 
satisfactory,  efficient,  and  economical— the  gov- 
ernments of  the  industrial  corporations. 

The  municipality  is  a  public  corporation, 
owned  and  governed  by  the  citizens;  the  indus- 
trial corporation  is  a  private  corporation,  owned 
and  operated  by  the  stockholders.  In  size  and 
capitalization,  many  industrial  corporations  are 
far  larger  than  the  average  municipal  corpora- 
tion; many  smaller.  Thus  there  is  no  essential 
difference  in  size.  But  the  municipal  corpora- 
tion, as  a  rule,  is  inefficient;  the  private  corpo- 
ration efficient.  What,  then,  is  the  difference 
in  their  government  which  makes  the  difference 
between  efficiency  and  inefficiency?  The  fre- 
quent elections,  the  short  term  of  office,  two 
years,  in  the  municipal  corporation  is  consid- 

137 


AMERICA  AND  THE   NEW  EPOCH 

ered  one  of  the  causes  of  inefficiency,  and  in 
commission  government  charters  we  thus  ex- 
tend the  office  term  to  five  years.  But  the 
industrial  corporation  elects  its  directors  every 
year,  thus  has  a  still  shorter  office  term,  and 
still  it  is  efficient!  District  representation  is 
another  alleged  cause  for  inefficiency,  and  there- 
fore often  eliminated  by  reform  charters,  and 
all  officers  chosen  from  the  city  at  large.  But 
every  corporation  which  owns  a  number  of  fac- 
tories has  representatives  of  its  different  fac- 
tories, of  its  different  manufacturing  interests, 
its  different  other  activities  in  its  governing 
boards.  Referendum  and  recall  are  considered 
dangerously  radical  novelties  by  many;  but 
their  principle  is  old  and  stale  in  the  corpora- 
tions, and  every  board  of  directors,  every  officer, 
would  resign  at  any  time  on  demand  of  the 
majority  of  the  stockholders. 

What,  then,  is  the  difference  between  corpo- 
ration government  and  municipal  government 
which  gives  the  former  the  efficiency  not  pos- 
sessed by  the  latter.'^  In  the  corporation,  at 
every  election,  every  director,  every  officer,  is  re- 
elected, as  a  matter  of  course,  unless  the  owners 
— in  this  case,  the  stockholders — are  very  much 
dissatisfied  with  the  management  of  the  cor- 

138 


PUBLIC  AND  PRIVATE  CORPORATIONS 

poration,  and  desire  to  make  a  radical  change, 
and  this  occurs  very  rarely.  In  the  municipality, 
however,  as  a  matter  of  course,  the  officers  are 
not  re-elected,  no  matter  how  much  the  owners 
— the  citizens — are  satisfied,  but  it  is  customary 
to  change  officers  at  every  election,  except  in 
rare  cases. 

Thus  the  corporation  government  is  contin- 
uous, and  thereby  efficient;  the  officer  knows 
that  if  he  acts  right  he  will  remain  in  office  as 
long  as  he  wishes.  He  can,  therefore,  plan  and 
organize,  and  accomplish  results.  The  annual 
election  thus  is  essentially  an  official  referendum 
and  recall  vote,  insuring  the  responsibility  and 
response  of  the  officers  to  the  owners'  interests. 

Compare  this  continuity  of  management  with 
the  biennial  overthrow  and  more  or  less  com- 
plete change  of  all  the  administrative  and  ex- 
ecutive organization,  policy,  and  experience, 
occurring  in  the  municipality,  and  the  reason 
of  the  inefficiency  of  the  latter,  the  efficiency 
of  the  former  is  given.  Unfortunately,  the  tend- 
encies for  governmental  reform  are  very  little 
in  this  direction  in  which  efficiency  has  been 
proven,  but  rather  are  in  the  opposite  direc- 
tion, to  lengthen  the  office  terms — thereby  in- 
creasing the  irresponsibility — and  to  discourage 

139 


AMERICA  AND  THE  NEW  EPOCH 

re-election,  often  to  such  an  extent  as  to  make 
it  illegal;  as  if  it  were  not  the  most  foolish  thing 
imaginable,  if  you  have  a  man  who  is  competent 
to  do  a  thing,  has  the  experience,  and  is  willing 
to  do  it,  to  put  him  out  of  the  office  and  put  a 
new  man  in  who  has  no  experience.  The  argu- 
ment that  it  is  dangerous  to  re-elect  the  same 
man  many  times,  since  he  may  establish  him- 
self permanently  in  power,  might  have  had  some 
justice  in  the  days  of  Washington,  but  certainly 
is  silly  to-day. 

Thus,  to  make  our  present  municipal  gov- 
ernments most  efficient,  as  efficient  as  corpo- 
ration governments,  would  require  abandon- 
ment of  the  custom  of  changing  officers  at  every 
election  in  favor  of  the  custom  of  re-electing 
the  same  men  as  long  as  they  are  reasonably 
satisfactory,  after  picking  out  good  and  efficient 
men  at  first.  But  no  change  of  the  form  of 
municipal  government  is  required,  except,  per- 
haps, that  to  annual  election  instead  of  biennial. 

However,  the  custom  of  rotation  in  office — 
often  for  the  distribution  of  spoils — is  so  inborn 
in  our  nation,  has  so  much  become  a  habit,  from 
the  early  Colonial  days  when  it  was  the  natural 
way,  that  it  does  not  appear  probable  that  it 
could  be  changed,  at  least,  not  very  soon;   but 

110 


PUBLIC  AND  PRIVATE  CORPORATIONS 

as  long  as  this  is  not  done  our  municipal  govern- 
ment will  remain  inferior  to  our  corporation 
government,  in  constructive  work,  no  matter 
what  other  improvements  are  made  in  our  po- 
litical governments. 

Very  few  of  the  improvements  proposed  in 
the  government  of  our  municipalities  are  new; 
most  of  them  are  old  and  long  established  in 
the  industrial  corporation  governments.  For 
instance,  proportional  representation  and  mi- 
nority representation.  It  does  not  exist  in  most 
public  elections.  A  small  change  in  the  vote, 
therefore,  shifts  majority  to  minority,  and  catas- 
trophically  reverses  all  governmental  policies, 
as  the  result  of  an  insignificant  percentage  of 
voters  changing  their  views  and  thereby  con- 
verting a  narrow  majority  into  a  minority.  As 
a  matter  of  course,  everj^  efficient  corporation 
has  always  given  representation  in  the  board  of 
directors  to  any  minority  of  stockholders  large 
enough  to  be  entitled  thereto;  it  would  not 
have  been  efficient,  thus  would  have  been  an 
economic  disadvantage  to  exclude  a  minority 
from  representing  their  views  in  the  board,  and 
proportional  representation,  which  includes  mi- 
nority representation,  has  always  been  the  aim 
of  corporation  management. 


XI 

DEMOCRACY   AND   MONARCHY 

As  seen  in  the  preceding  chapters,  a  reorgan- 
jLa.  ization  of  our  nation's  industrial-political 
system  is  inevitable,  if  we  hope  to  retain  and 
extend  our  industrial  prosperity  against  the 
highly  organized  and  efficient  co-operative  sys- 
tems of  industrial  society  into  which  the  Euro- 
pean war  is  forcing  the  nations.  We  will  have 
to  stop  our  muddling,  our  interference  of  every- 
body with  everybody,  and  prepare  to  meet 
Europe  by  a  still  more  efficient  co-operative 
industrial  system. 

How  can  we  organize  such  efficiency  of  in- 
dustrial co-operation?  What  forms  or  shapes 
must  such  organization  assume  in  our  nation? 
It  is  a  matter  of  evolution,  of  which  we  cannot 
foresee  the  end,  but  one  thing  we  can  see  with 
certainty,  and  that  is,  how  not  to  proceed;  we 
cannot  copy  European  organizations  and  hope 
to  be  successful.    It  would,  indeed,  be  an  easy 

142 


DEMOCRACY  AND   MONARCHY 

task  if  we  could.  We  all  realize  that  Germany 
had  reached  the  highest  industrial  efficiency 
before  the  war,  and  thus  it  would  appear  nat- 
ural to  copy  the  German  methods,  the  German 
organization,  and  thereby  expect  to  get  the 
same  efficiency.  But  the  industrial  organiza- 
tion which  has  been  so  successful  in  Germany, 
if  attempted  in  our  country,  would,  in  all  prob- 
ability, be  a  disastrous  failure.  We  may  just 
as  well  realize  this,  as  there  is  a  strong  sentiment 
in  our  country  to  copy  European  ways,  es- 
pecially now,  when  the  need  of  preparedness  to 
meet  the  European  nations  after  the  war  has 
been  so  forcibly  impressed  upon  us,  that  many 
of  us  have  lost  all  perspective  and  hysterically 
call  for  doing  something  or  anything,  however 
foolish  it  might  appear  on  calmer  consideration. 
Methods  of  organization  and  industrial  prog- 
ress which  have  been  successful  in  Europe  can- 
not be  successful  in  our  country,  nor  can 
American  ways  be  transplanted  to  Europe  and 
there  give  the  same  results  as  here,  because  our 
national  temperament  is  entirely  different,  is, 
indeed,  the  opposite  of  that  of  all  European  na- 
tions. x\merica's  national  character  is  democrat- 
ic, while  that  of  all  the  European  nations,  from 
republican  France  to  constitutional  Germany 

lo  143 


AMERICA  AND  THE  NEW  EPOCH 

and  autocratic  Russia  or  theocratic  Turkey,  is 
monarchical,  and  between  these  two  national 
temperaments  there  is  an  unbridgeable  gulf. 

The  fundamental  difference  between  the  two 
national  temperaments  is  best  illustrated  by  con- 
sidering the  different  ways  by  which  a  change, 
such  as  an  industrial  progress,  is  brought  about. 

In  the  monarchical  nation  the  problem  such 
as  the  necessity  of  vocational  education,  or  of 
labor  legislation,  old-age  insurance,  etc.,  is  dis- 
cussed by  individuals,  societies;  political  parties 
write  it  in  their  platforms,  etc. ;  but  all  this  re- 
mains a  mere  academic  discussion  without  re- 
sults, until  the  central  Government  is  converted 
to  the  new  idea.  Then  the  new  idea  is  intro- 
duced by  governmental  order;  the  central  Gov- 
ernment makes  the  plans  and  establishes  the 
organization;  a  federal  bureau,  with  sub- 
organizations  in  the  states  or  provinces;  below 
them  others  in  the  municipalities,  etc.  A  part 
of  the  new  organization  is  first  introduced,  as 
much  as  the  federal  Government  considers  ad- 
visable, then  more  and  more,  and  so  from  the 
central  Government  the  organization  is  ex- 
tended toward  the  periphery,  to  the  individual. 
Thus  Germany's  social  and  industrial  progress 
was  accomplished;    until   the  federal  Govern- 

144 


DEMOCRACY  AND  MONARCHY 

ment  was  convinced  of  the  necessity  of  social 
legislation  all  the  demands  of  the  Social  Demo- 
cratic party  were  in  vain  as  regards  construc- 
tive action;  though  they  obviously  were  the 
driving  force  which  finally  converted  the  Gov- 
ernment. But  when,  finally,  the  Government 
was  convinced,  progress  started  and  proceeded 
until  the  results  were  accomplished. 

Entirely  the  reverse  is  the  development  and 
introduction  of  a  new  idea  in  a  democratic 
nation,  as  ours.  There  is  no  strong  federal  Gov- 
ernment which  could  force  new  ideas  on  the 
nation  by  governmental  order,  and  even  if  laws 
could  be  passed  to  this  purpose  they  would 
either  be  declared  unconstitutional  or  remain  a 
dead  letter,  like  so  many  of  our  laws. 

A  new  idea,  a  proposition  toward  progress, 
etc.,  is  suggested  by  individuals.  It  spreads 
and  is  discussed  by  groups  of  individuals,  and 
when  it  has  made  sufficient  progress  it  is  tried 
locally  by  groups  of  individuals,  local  societies, 
corporations,  or  municipalities.  Other  private 
or  public  groups  also  try  constructively  the  new 
idea,  usually  in  a  different  form,  and  finally  it 
is  tried  in  many  different  places,  by  many  kinds 
of  organizations.  Thus  vocational  education 
is  being  tried  to-day  in  our  nation.    There  is  an 

145 


MIERICA  AND  THE  NEW  EPOCH 

enormous  waste  of  energy  by  duplication  of 
work,  by  repeating  tlie  same  mistakes,  etc.,  but 
gradually  the  more  serious  errors  are  recog- 
nized and  avoided,  the  experience  of  previous 
constructive  work  is  made  at  least  partly  avail- 
able in  later  attempts.  With  the  spreading  of 
the  idea  it  reaches  larger  organizations;  na- 
tional societies,  state  governments,  groups  of 
corporations,  or  entire  industries.  The  results 
and  methods  of  procedure  are  codified  and  in- 
formation is  exchanged,  and  when  finally  the  new 
idea  reaches  the  national  Government  it  has 
been  fairly  well  crystallized  into  the  final  form 
in  which  it  is  feasible,  and  dangerous  errors  and 
mistakes  are  eliminated,  and  if  the  federal  Gov- 
ernment takes  action,  it  practically  consists  in 
what  may  be  called  standardizing  best  practice. 
But  when  this  occurs,  the  new  idea  has  long 
ceased  to  be  a  new  idea,  has  permeated  all  the 
nation,  and  practically  become  a  part  of  the 
national  economy. 

This  democratic  method  is  very  inefficient, 
very  slow  in  accomplishing  results,  and  very 
discouraging  compared  with  the  rapidity  with 
which  progress  is  possible  in  a  centralized  mon- 
archical nation.  It  has,  however,  the  advan- 
tage that  when  results  are  at  last  accomplished 

146 


DEMOCRACY  AND  MONARCHY 

they  are  permanent,  are  a  part  of  the  nation, 
and  especially — and  this  is  the  most  important 
advantage — no  great  mistakes  can  be  made,  as 
the  first  constructive  trials  are  on  a  small  scale, 
and  thus  any  errors  and  mistakes  limited  in 
extent,  and  when  the  idea  becomes  national  in 
scope,  all  serious  errors  have  been  eliminated 
by  the  experience  of  constructive  work  in  smaller 
scope. 

Thus  the  monarchical  method  is  superior  by 
getting  quicker  results,  but  a  mistake  is  liable 
to  be  a  national  disaster.  The  democratic 
method  is  slow,  but  safe.  An  illustration  hereof 
is  social  legislation.  We  realize  that  the  most 
serious  problem  before  our  nation,  which  must 
be  solved  before  we  can  hope  for  ejQBcient  indus- 
trial reorganization,  is  to  secure  the  active  co- 
operation of  the  masses,  those  who  are  becom- 
ing increasingly  indifferent,  if  not  antagonistic, 
to  the  maintenance  of  existing  society.  The 
German  Government  has  solved  this  problem 
by  eliminating  the  three  great  fears  of  the 
masses  by  an  effective  social  legislation.  The 
result  was  that  when  called  upon  for  national 
defense  even  the  "revolutionary"  Social  Dem- 
ocratic party,  with  its  millions  of  members, 
stood  solidly — and  actively — behind  the  Gov- 

147 


AMERICA  AND  THE  NEW  EPOCH 

ernment,  a  plienomenon  little  understood  in 
other  nations,  even  by  the  socialists.  We  have 
been  muddling  with  this  problem  for  half  a 
generation,  and  conditions  are  becoming  more 
unsatisfactory,  rather  than  better.  Here  the 
monarchical  method  seems  to  have  shown  a 
vast  superiority,  accomplished  results,  where  we 
have  failed  thus  far.  But  was  it  really  so.f^  Be- 
fore Germany  started  its  successful  social  legis- 
lation it  had  tried,  under  Bismarck,  to  solve  the 
problem,  in  the  true  monarchical  way,  by  for- 
cibly suppressing  the  elements  which  were  be- 
coming indifferent  and  antagonistic,  and  had 
split  the  nation  in  twain,  made  millions  open- 
ly hostile  to  the  nation.  At  the  end  of  the 
ten  years'  war  against  socialism,  when  revo- 
lutionary socialism  had  even  entered  and  per- 
meated the  army,  if  then  Germany  had  been 
involved  in  a  serious  war  it  would  have  gone  to 
pieces  at  the  first  blow.  All  that  would  have 
happened  which  those  unfamiliar  with  the 
changed  social  conditions  of  Germany  expected 
to  happen  and  failed  to  see  at  the  beginning  of 
the  present  war. 

Thus  it  cannot  be  said  that  the  democratic 
method — from  the  intHvidual  toward  the  cen- 
tral Government — "concentral,"  is  inferior,  nor 

lis 


DEMOCRACY  AND  MONARCHY 

that  it  is  superior  to  the  "decentral"  monar- 
chical method — from  tlie  central  Government 
toward  the  individual. 

But  it  can  be  said  that  the  decentral  method 
is  the  only  feasible  and  only  possible  one  for  a 
nation  of  monarchical  temperament — that  is, 
for  an}^  of  the  large  European  nations,  and  the 
concentral  method  is  the  only  feasible  one  for 
a  nation  of  democratic  temperament  like  ours, 
and  decentral  methods  thus  are  unsuitable  and 
impossible  for  a  democratic  nation — that  is,  we 
cannot  copy  Europe's  successful  methods  and 
hope  to  succeed. 

Our  nation  is  the  only  large  democratic  na- 
tion, thus  we  have  no  example  which  we  can 
follow,  and  the  problem  of  our  industrial  re- 
organization thus  is  a  far  vaster  one  than  it 
appears  at  first;  we  have  to  find  new  ways  and 
means,  accomplish  a  thing  which  has  never  been 
accomplished  before — co-operative  organization 
of  a  democratic  nation.  Democracy  itself  thus 
is  on  trial  before  the  judgment  of  history;  if  we 
fail,  democratic  America  ends  as  a  world  power, 
is  an  unsuccessful  experiment  in  the  world's 
history,  and  the  world  goes  back  to  monarchical 
forms  of  organization — even  if  they  shoidd  call 
their  ruler  "President,"  and  play  at  elections. 

119 


XII 

evolution:  political  government 

OUR  nation  has  been  fairly  prosperous  and 
successful  thus  far,  in  spite  of  our  previous 
and  present  method  of  dealing  with  social,  in- 
dustrial, and  political  problems,  which  is  no 
method  at  all,  but  mere  muddling.  However, 
we  had  no  serious  foreign  competition  to  meet; 
we  had  at  our  disposition  the  vast  and  un- 
touched resources  of  a  virgin  continent,  the 
intellectual  stores  of  the  Old  World,  and  the 
continuous  supply  of  skilled  and  unskilled  labor, 
in  the  despised  immigrant,  who,  after  all,  has 
made  America  what  it  is  to-day.  The  most 
desirable  immigration  —  from  England,  Ger- 
many, Ireland,  Scandinavia — practic<ally  ended 
years  ago,  and  now,  as  the  result  of  the  war,  all 
immigration  threatens  to  stop,  except  perhaps 
that  from  the  least  desirable  nationalities.  In- 
tellectually, ovir  nation  has  now  advanced  so 
far  and  on  a  path  so  divergent  from  that  of 

150 


EVOLUTION:    POLITICAL  GOVERNMENT 

Europe  that  we  cannot  expect  much  further 
help.  The  resources  of  our  continent,  wliich 
appeared  inexhaustible  to  the  early  settlers,  are 
practically  exhausted,  and  the  time  is  nearly 
here  when  we  will  have  to  stop  living  as  a  para- 
sitic nation,  consuming  what  we  have  not  pro- 
duced, but  we  will  have  to  live  on  our  income; 
putting  into  the  soil  as  fertilizer  what  we  take 
out  as  crops;  planting  and  raising  the  trees 
which  we  cut  down  for  lumber;  raising  the  food 
which  we  feed  to  our  sheep  and  cattle,  and  that 
with  a  reorganized,  highly  efficient  Europe  in 
competition. 

In  our  industrial  age  the  essential  require- 
ments of  an  efficient  national  organization  com- 
prise: Continuity,  competency,  and  responsi- 
bility of  the  administrative  organization. 

In  our  complex  civilization,  it  usually  takes 
years  before  any  work  undertaken  by  an  admin- 
istrator is  completed,  many  more  years  before 
its  results  are  seen.  Thus  when  the  adminis- 
tration changes  frequently,  as  in  our  political 
offices,  constructive  work  is  done  blindly, 
started  by  men  who  never  can  follow  the  work 
to  completion,  see  the  results  appearing  and 
direct  or  modify  the  plans  to  secure  the  desired 
results  most  effectively ;  or  men  are  called  upon 

151 


AMERICA  AND  THE   NEW  EPOCH 

to  continue  and  complete  work  which  they  have 
not  started,  which  they  possibly  only  incom- 
pletely understand,  or  with  which  they  are  out 
of  sympathy.  It  is  only  in  those  side  lines  of 
our  political  government  where  the  oflSce  is  held 
more  continuousl3^  under  civil-service  rules  or 
because  the  office  is  not  sufficiently  important 
to  warrant  its  inclusion  in  the  "distribution  of 
spoils,"  that  constructive  work  is  accomplished,, 
as  in  the  building  of  the  Panama  Canal,  the 
reclamation  work  by  the  Federal  Government, 
some  of  the  supervisory  work  by  State  commis- 
sions, etc.,  and  even  in  these  there  is  the  con- 
tinuous danger  of  political  interference,  of  the 
work  of  many  years  being  undone,  or  per- 
verted to  vicious  purposes  by  some  temporary 
political  influence.  It  is  so  much  easier  to  de- 
stroy than  to  construct;  it  takes  so  long  a  time 
to  accomplish  constructive  work,  and  so  short  a 
time  to  destroy  the  work  of  many  years. 

Thus  there  can  be  no  efficiency  without  con- 
tinuity of  the  administration. 

That  competency  of  the  director  of  the  work 
is  necessary  for  the  success  of  any  work  is  so 
obvious  that  nobody  would  think  this  even  a 
subject  of  discussion,  but  as  a  matter  of  course, 
in   legal   matters   everybody   employs   a   com- 

152 


EVOLUTION:    rOIJTICAL  GOVERNMENT 

petent  lawyer,  in  matters  of  health  a  competent 
physician,  in  matters  of  administration  an  ad- 
ministrator. But,  strange  to  say,  as  soon  as  we 
come  to  the  consideration  of  political  ojffices  we 
disregard  all  these  obvious  and  self-evident 
truisms,  and  have  no  hesitation  to  place  a  man 
who  has  failed  in  every  business  he  undertook,  in 
charge  of  the  business  management  of  the  mu- 
nicipality ;  a  man  who  cannot  run  his  own  house- 
hold, in  administrative  charge  of  the  community. 
If,  then,  continuity  of  office,  held  by  compe- 
tent men,  is  necessary  for  the  efficiency  which 
is  the  fundamental  requirement  of  successful 
co-operation^  there  must  be  an  efl'ective  respon- 
sibility, at  le^st  until  such  time  when  all  men 
are  angels,  or  at  least  sufficiently  many  that 
all  offices  can  be  filled  with  men  who  are  and 
remain  unselfish,  industrious,  progressive,  and 
beyond  the  possibility  of  behig  perverted  by  the 
power  of  office. 

^-ANh'dt,  then,  are  the  structural  ejements  in 
our  American  nation  from  which  a  continuous, 
competent,  and  responsible  government  coidd 
develop  by  evolution — a  government  such  as  is 
required  for  the  efficient  industrial  co-operation 
of  all  citizens  in  the  interest  of  all,  under  demo- 
cratic principles? 

153 


AMERICA  AND  THE  NEW  EPOCH 

In  sucli  organization  there  can  be  no  indus- 
trial competition,  but  by  the  co-operation  of  all 
producers  duplication  of  work  and  all  waste 
effort  is  eliminated.  The  production  is  con- 
trolled to  correspond  with  the  legitimate  de- 
mands for  the  product,  and  all  production  for 
mere  profit,  without  regard  to  the  demand  for 
the  product,  ceases,  and  with  it  all  organization 
for  the  purpose  of  creating  a  demand  where  it 
does  not  exist.  As  a  matter  of  course,  this 
eliminates  the  periodic  fluctuations  of  produc- 
tion, which  give  rise  to  the  successive  periods  of 
business  depression  and  business  prosperity,  and 
which  are  the  bane  of  our  present  chaotic  in- 
dustrial system.  In  engineering,  architecture, 
design,  etc.,  instead  of  a  number  of  men  doing 
the  same  work  independently,  necessarily  in- 
ferior, due  to  the  limitation  of  each  individual, 
and  then  having  somebody  select  one  of  the 
propositions — often  somebody  who  himself  has 
not  the  professional  qualifications  to  judge 
which  is  the  best — one  proposition  would  be 
made  by  the  co-ojierative  effort  of  all  the  men 
competent  professionally,  and  so  embodying 
the  collective  experience  and  knowledge  of  all. 
Instead  of  having  a  number  of  separate  and 
competitive   sales   organizations,  each  describ- 

154, 


EVOLUTION:    POLITICAL  GOVERNMENT 

ing  and  representing — or  misrepresenting — 
their  product,  with  the  result  that  the  prospec- 
tive user  gets  httle  rehable  information,  one 
organization  will  supply  complete  and  correct 
information,  as  there  is  no  further  reason  to 
misrepresent,  no  reason  to  dwell  extensively  on 
the  favorable  features,  and  omit  altogether,  or 
skip  lightly  over  the  unfavorable  features,  but 
every  interest  is  toward  correct  representation 
of  all  features. 

Competition  between  industries  would  cease; 
thus,  in  transportation,  the  country's  water- 
ways would  be  used  to  the  fullest  extent,  in 
combination  with  the  railroads,  and  no  interest 
would  tend  to  deflect  to  the  railroads  what 
could  more  economically  be  carried  by  water, 
or  inversely,  and  both  forms  of  transportation 
would  become  much  more  economical  by  co- 
operation. 

There  would  be  no  desire  to  graze  cattle  on 
lands  adapted  for  wheat-raising,  nor  attempts 
to  raise  wheat  on  farms  unsuited  thereto,  nor 
would  forest  growth  be  destroyed  by  sheep- 
raising,  or  the  value  of  the  river  valleys,  of  the 
country's  water-powers,  be  destroyed  by  reck- 
less deforestation  of  the  headwaters.  With  the 
same  interests  controlling  all  these  activities  it 

155 


AMERICA  AND  THE  NEW  EPOCH 

is  obvious  that  no  activity  would  be  permitted 
which  does  more  harm  in  one  respect  than  it 
profits  in  another,  and  no  interference  would 
be  allowed  between  the  different  industrial 
activities,  beyond  that  incident  to  human  im- 
perfection, and  thus  unavoidable. 

All  this  is  not  a  mere  impracticable  dream,  but 
it  has  long  been  an  established  fact,  has  been 
the  operating  principle  within  all  the  more  pro- 
gressive large  industrial  corporations,  and  all 
that  is  necessary  is  to  extend  methods  of  eco- 
nomic eflScicncy  from  the  individual  industrial 
corporation  to  the  national  organism  as  a  whole. 

Thus  there  will  be  competition  between  water 
transportation  and  railway  transportation,  to 
decide  which  in  each  individual  instance  is  more 
economical,  considering  quality  of  the  trans- 
ported material,  distance,  time,  etc.,  while  now 
the  waterways  may  stand  idle  for  lack  of  a 
railway  connecting  with  them,  or  for  lack  of 
transfer  facilities,  or  hundreds  of  millions  are 
wasted  in  the  construction  of  waterways  which 
can  never  economically  pay  for  their  cost,  but 
the  only  legitimate  purpose  of  which  is  to  keep 
the  railroad  freight  rates  down  by  their  compe- 
tition. 

There  will  be  competition,  whether  gas-engine 

15G 


EVOLUTION:    POLITICAL  GOVERNMENT 

or  electric  motor  is  to  be  used,  whether  a  local 
steam-turbine  plant  is  to  be  installed,  or  power 
bought  from  a  long-distance  transmission  sys- 
tem. But  the  decision  will  be  made  on  the 
basis  of  the  relative  economy  of  the  various 
propositions,  uninfluenced  by  commercial  or 
financial  considerations  alien  to  economy. 

Financial  manipulation  for  the  mere  acquisi- 
tion of  more  money,  without  regards  to  con- 
structive economical  organization,  necessarily 
must  be  impossible. 

There  must  be  an  active  co-operation  be- 
tween all  producers,  from  the  unskilled  laborer 
to  the  master  mind  which  directs  a  huge  indus- 
trial organization.  Such  active  co-operation 
presupposes  that  everybody  feels  personally  in- 
terested in  the  industrial  economy.  This  pre- 
supposes that  the  fear  of  unemployment,  of 
sickness,  and  old  age  has  been  relegated  into  the 
relics  of  barbarism,  and  everybody  is  assured  an 
appropriate  living,  is  assured  employment  when 
capable  to  work,  and  protected  against  want, 
maintained  in  his  or  her  standard  of  living,  when 
not  able  to  work,  not  as  a  matter  of  charity,  but 
as  an  obvious  and  self-evident  duty  of  society 
toward  the  individual. 

This  can  be  done  by  effective  social  legisla- 

157 


AMERICA  AND  THE  NEW   EPOCH 

tion,  as  it  has  been  done  in  other  countries;  it 
is  being  actively  considered  within  our  indus- 
trial corporations  as  well  as  by  the  public  at 
large;  some  work  in  this  direction  has  been 
done  by  legislation,  more  still  within  many  in- 
dustrial corporations,  and  the  development  of 
this  social  activity  would  probably  have  pro- 
gressed still  further  in  our  corporations  if  the 
disorganization  by  legislative  interference  had 
not  hindered  here,  as  in  most  other  directions, 
the  progress  of  industrial  organization. 

It  is  obvious  that  "industry"  here  means  not 
merely  the  manufacturing  industries,  but  equal- 
ly includes  transportation  and  communication, 
agriculture,  the  animal  industries,  dairying,  etc. 
— in  short,  all  the  human  activities  which  deal 
directly  or  indirectly  with  the  necessities  of  life. 

The  economic  development  of  the  world,  ac- 
celerated by  the  world's  war,  has  made  such  a 
co-operative  industrial  organization  of  our  na- 
tion a  necessity  of  self-preservation. 

As  structural  foundation,  on  which  to  build 
such  structure  by  evolution,  in  correspondence 
with  our  democratic  national  temperament,  we 
have  our  political  governments  —  Federal, 
State,  and  municipal — our  large  national  so- 
cieties, and  our  indusli-ial  corporations. 

158 


EVOLUTION:    POLITICAL  GOVERNMENT 

Of  these,  the  poHLical  government  is  the  only 
one  which  is  all-embracing,  is  controlled  by  and 
responsible  to  all  citizens,  at  least  nominally. 
Therefore,  while  iLs  constructive  power  may  be 
practically  ?iil,  due  to  its  form  of  organization,  it 
has  a  vast  inhibitory  power,  far  greater  than 
any  other  power  in  our  country.  We  have  seen 
this,  and  continuously  see  it  in  the  action  toward 
corporations,  in  the  national  conservation  move- 
ment, even  in  the  power  exerted  by  subordinate 
governmental  bureaus. 

Thus,  no  organization  which  does  not  include 
the  political  government  as  an  essential  part  of 
the  structure  can  hope  to  succeed. 

JThe  natural  suggestion,  then,  would  be  to 
have  the  Federal  Government,  with  its  sub- 
ordinate State  and  municipal  governments,  or- 
ganize, control,  and  administrate  the  country's 
economic-industrial  system. 

Thus  the  political  government  would  acquire 
and  operate  all  means  of  transportation  and 
communication — railroads,  canals,  pipe  lines, 
mail  and  express,  telegraph  and  telephone.  It 
would  supervise  and  control  all  corporations 
and  their  relations  with  each  other  and  toward 
the  public.  It  would  control  the  relation  of  em- 
ployees witliin  the  corporations,  by  mandatory 

n  159 


AMERICA  AND  THE   NEW  EPOCH 

arbitration,  by  unemployment,  sickness,  and 
old-age  insurance;  control  the  hours  of  work, 
and  working  conditions,  etc.  There  is  a  consid- 
erable sentiment  in  favor  of  this  organization, 
and  this  sentiment  is  growing  in  strength. 

It  can  be  done,  because  it  has  been  success- 
fully accomplished  abroad,  in  Germany,  and 
has  united  all  classes  of  people,  and  given  the 
economic  efficiency  expected  from  it. 

However,  in  our  nation  it  would  require  not 
merely  that  the  polilical  government  take  over 
the  industrial  control,  as  was  the  case  in  Ger- 
many, but  a  government  would  first  have  to  be 
created,  capable  to  do  this,  a  problem  which  is 
far  more  difficult  than  that  which  Germany 
solved,  and  appears  impossible  with  the  demo- 
cratic temperament  of  our  nation.  It  pre- 
supi)Oses  a  powerful,  centralized  government  of 
competent  men,  remaining  continuously  in 
office,  and  no  political  government  of  this  kind 
can  exist  in  the  America  of  to-day — nor  in  the 
America  of  to-morrow. 

It  is  true  that  our  political  governments — 
Federal,  State,  and  nuuiicipal — are  steadily  be- 
coming stronger,  undertake  more  activities,  and 
successfully  accomplish  what  they  could  never 
have   undertaken   twenty   years   ago;    that  a 

160 


EVOLUTION:    POLITICAL  GOVERNMENT 

liiglier  class  of  men  enter  governmental  service 
than  foi-merly;  that  the  quality  of  governmental 
work  improves — graft,  corruption,  and  mis- 
management for  selfish  purposes  steadily  de- 
crease. On  the  surface  the  latter  may  not 
appear  so,  and  we  hear  as  much  to-day  of  po- 
litical mismanagement  and  graft  as  we  did 
twenty  years  ago.  But  if  we  look  deeper  into 
it  we  cannot  fail  to  see  that  the  reason  of  this 
is  that  many  things  are  now  resented  by  the 
voters  as  improper,  and  lead  to  political  death 
of  the  office-holder,  which  twenty  years  ago 
were  not  noticed  at  all,  but  passed  as  natural 
and  general  characteristics  of  political  office. 

Thus  our  political  governments  are  becoming 
better,  stronger,  and  more  capable  of  construc- 
tive work,  and  apparently  are  gradually  pro- 
gressing from  the  weak  and  inefficient  govern- 
ment of  the  democratic  nation,  toward  the 
strong  and  efficient  government  of  the  mon- 
archical nations. 

But  is  this  really  so,  and  are  we  really  chang- 
ing from  the  democratic  concentral  attitude 
toward  the  monarchical  decentral  attitude  of 
governmental  activity.'^  Looking  deeper  into 
it,  there  appears  nothing  to  warrant  such 
assumption,  but  the  increasing  strength  and  ef- 

IGl 


AMERICA  AND  THE  NEW  EPOCH 

ficiency  of  the  political  government  is  shown 
almost  exclusively  in  concentral  direction.  That 
is,  with  the  continuing  development  and  prog- 
ress of  our  nation,  more  and  more  problems, 
starting  from  individual  effort  and  passing 
through  group,  municipal.  State  action,  finallj' 
reach  the  Federal  Government  and  require  codi- 
fication, on  true  democratic  or  concentral  prin- 
ciples, and  therefore  of  necessity  created  the 
more  eflBcient  governmental  machinery  re- 
quired to  deal  with  them.  But  where  our 
Government  has  attempted  to  deal  decentrally 
with  problems,  whether  national,  State,  or 
municipal — 'that  is,  attempted  to  solve  prob- 
lems which  had  not  been  solved  and  com- 
pletely worked  out  before  on  smaller  scale  by 
smaller  organization — it  has  failed  and  is  fail- 
ing to-day.  Such,  for  instance,  is  the  case  in 
the  dealing  with  corporations,  with  the  national 
conservation  movement,  etc. 

Thus  our  national  character  and  our  Govern- 
ment have  remained  the  same,  and  a  solution 
of  the  industrial  problem  by  the  initiative  of 
the  political  Government  remains  as  improbable 
as  ever. 

Our  national  societies  have  done  much  suc- 
cessful industrial  organizing  work.     Such,  for 

162 


EVOLUTION:    POLITICAL  GOVERNMENT 

instance,  as  the  engineering  standardization, 
which  was  undertaken  and  accomplished  by 
American  national  engineering  societies,  and 
from  here  has  spread  to  other  countries  and  is 
now  concentrally  beginning  to  reach  our  Gov- 
ernment. The  movement  for  industrial  safety 
originated  and  developed  in  this  manner.  In 
the  field  of  morality  and  temperance,  national 
societies  have  been  active,  also,  though  perhaps 
not  always  wisely. 

However,  the  organization  of  even  the  largest 
national  societies  necessarily  is  so  limited  that 
with  the  exceptions  of  certain  definite  fields  of 
activity  they  cannot  be  counted  upon  for  more 
than  assistance  and  co-operation  in  the  indus- 
trial reorganization  of  the  nation. 


XIII 

evolution:  industrial  government 

HIE  large  industrial  corporation  is  to-day  by 
far  the  most  efficient  organization,  in  spite 
of  the  inefficiency  forced  upon  it  by  the  political 
Government.  It  is  still  very  crude  and  imperfect 
in  many  respects,  and  especially  it  is  still  greatly 
deficient  in  the  social  relations  within  the  organi- 
zation and  toward  the  general  public.  If  an 
efficient  co-operative  government  is  to  be  built 
up  from  the  industrial  corporations,  the  in- 
dustrial corporation  must  first  become  united 
within  itself — that  is,  the  indifference  and  an- 
tagonij?in  within  the  corporation  must  be  over- 
come, and  the  same  co-operative  feeling  brought 
about  between  the  shop  force  and  the  adminis- 
tration which  exists  and  always  has  existed  in 
most  corporations  between  the  office  force  and 
the  administration.  That  is,  the  welfare  of  the 
corporation  must  be  made  just  as  nuich  to  the 
interest  of  the  shop  force  as  it  is  to  the  interest 

161 


EVOLUTION:    INDUSTRIAL  GOVERNMENT 

of  the  office  force.  Not  that  there  should  be  no 
differences  of  interest  between  individual  em- 
ployee and  corporation;  differences  of  interest 
exist  and  will  remain  among  the  office  men  as 
well  as  in  the  shops.  But  those  hundred  thou- 
sands who  only  two  years  ago  were  thrown  out 
of  work  by  the  business  depression,  were  willing 
to  work,  but  for  many  months  could  find  no 
work,  and  saw  their  few  dollars  which  they  had 
saved,  spent;  those  who  had  started  paying  for 
a  small  home  and  saw  all  that  they  had  accom- 
plished gone  by  the  foreclosure  of  the  mortgage, 
saw  their  families  scattered  and  thrown  upon 
charity,  and  all  this  without  any  fault  of  their 
own — to  them  existing  society  cannot  appeal  as 
the  best  possible  one;  they  can  hardly  be  ex- 
pected to  feel  interested  in  tlie  maintenance  of 
a  society  in  which  they  are  treated  thus,  cannot 
be  patriotic  in  the  defense  of  these  conditions; 
neither  can  the  other  hundred  thousands  or  mil- 
lions, who  have  escaped  this  time,  but  have  the 
possibility  of  the  same  fate  hanging  over  them. 
Thus  the  assurance  of  work  when  capaljle  of 
working,  the  insurance  of  a  living  in  their  ac- 
customed standard  when  not  capable  of  work- 
ing, are  the  fundamental  requisites  to  secure 
interest  in  the  maintenance  of  existing  condi- 


AMERICA  AND  THE  NEW   EPOCH 

tions  witlioiit  which  there  can  be  no  real  pa- 
triotism, no  real  co-operation. 

This  has  nothing  to  do  with  the  broader 
question  of  socialism — that  is,  of  the  elimination 
of  capital.  Socialism  has  as  many  followers  in 
the  offices  of  our  corporations  as  it  has  in  the 
shops,  and  in  no  way  precludes  co-operation 
within  the  corporation;  indeed,  in  some  respects 
the  corporation  may  be  considered  as  the  first 
step  toward  socialism,  and  the  industrial  gov- 
ernment of  the  nation  by  the  united  corpora- 
tions as  preliminary  and  crude  form  of  socialistic 
society. 

But  assuming  the  corporation  united  within 
itself,  the  public  sentiment  sufficiently  educated 
to  stop  political  government  from  its  disorgan- 
izing activities,  nothing  would  stand  in  the  way 
then  of  organizing  an  efficient  system  of  co- 
operative industrial  production,  not  by  some 
man's  superior  organizing  power,  but  in  the 
natural  trend  of  industrial  development. 

With  absorption  of  smaller  corporations  by 
larger  ones,  and  consolidation  to  still  larger 
corporations,  the  development  proceeds  until 
the  industry  is  organized  in  one  or  a  small  num- 
ber of  very  large  corporations.  There  is  no 
competition,   but   an    executive   committee   of 

1()0 


EVOLUTION:    INDUSTRIAL  GOVERNMENT 

representatives  of  the  corporations  or  branches 
of  corporations  engaged  in  the  same  and  similar 
in(iustries  co-ordinates  and  correlates  the  work 
of  the  corporations,  decides  on  production,  on 
prices,  policies,  etc.  Executive  committees 
with  their  members  chosen  from  different  in- 
dustries take  care  of  the  co-operation  of  these 
industries,  and  finally  an  Industrial  Senate  as  the 
supreme  executive  committee  co-ordinates,  con- 
trols, and  directs  all  the  country's  industries — 
that  is,  governs  the  country.  Thus,  an  indus- 
trial government  would  be  established  with  an 
authority  greater  than  the  world  has  ever  seen, 
and  still  without  any  mandatory  power,  not, 
maintained  by  a  police  force,  but  based  on! 
mutual  co-operation  for  everybody's  interest.- 
Any  corporation  which  does  not  wish  to  join 
or  take  part  in  the  national  industrial  organi- 
zation is  free  to  stay  outside,  as  long  as  it  con- 
forms to  the  universal  policy,  but  if  the  outsider 
refuses  to  co-operate,  co-operation  is  withdrawn 
from  him,  also,  as  "outlaw"  or  "scab"  corpo- 
ration, to  use  the  expression  of  labor  organiza- 
tions. That  is,  the  organized  industries  refuse 
to  do  any  work  for  such  an  outlaw,  or  have  any- 
thing to  do  with  any  work  containing  the  prod- 
uct of  the  outlaw  corporation.    Rapid  extinction 

167 


AMERICA  AND  THE  NEW  EPOCH 

of  such  outlaw  would  obviously  be  the  result, 
without  any  legal  or  mandatory  power  being 
necessary.  If  we  realize  how  excessive  capitali- 
zation of  otherwise  conservative  corporations 
has  been  forced,  by  the  necessity  of  buying  up 
competitors  at  exaggerated  values  based  on 
their  potential  destructiveness  as  competitors; 
how  corporations  have  been  organized  for  the 
mere  purpose  of  holding  up  existing  corporations 
for  an  excessive  price  in  selling  out — it  is  obvious 
that  prompt  elimination  of  any  body  attempt- 
ing similar  action  is  necessary  in  the  interest  of 
the  general  industrial  welfare  of  the  nation. 

There  is  a  certain  glamour,  to  some  minds,  in 
the  attitude  of  the  one  who  defies  the  majority; 
the  "American  hero"  who  goes  as  strike- 
breaker to  work  where  the  organized  employees 
strike;  the  individual  manufacturer  who  breaks 
price  agreements  and  undersells  the  others,  to 
get  the  business  at  prices  which  conservative 
producers  cannot  meet,  as  they  leave  no  margin 
of  fair  profit.  But  there  is  practically  never  any 
moral  issue  behind  the  action  of  the  scab, 
whether  individual  or  corporation,  but  it  is  the 
sordid  attempt  of  getting  an  individual  advan- 
tage at  the  cost  of  the  others.    It  is  the  opposite 

of  co-operation,  and  no  efficient  industrial  sys- 

i(;8 


EVOLUTION:    INDUSTRIAL  GOVERNMENT 

tern  can  he  built  up,  as  long  as  sucli  altitude 
has  any  chance  to  succeed  even  temporarily. 
— How  would  the  officers  of  such  national  gov- 
ernment by  the  co-operative  organization  of  the 
industrial  corporations  be  chosen?/'  By  popular 
election?  Imagine  the  chief  engineer  of  a  man- 
ufacturing company  elected  by  the  majority 
vote  of  all  the  employees!  Or  the  general  man- 
ager, or  the  comptroller,  or  chemist,  or  bacteri- 
ologist, the  mathematician,  or  designing  engi- 
neer; it  would  not  be  democratic,  but  it  would 
be  chaotic.  Not  one-tenth  of  the  emj)loyces 
are  engineers  and  therefore  capable  of  judging 
on  the  engineering  qualifications,  and  their  vote 
in  electing  the  chief  engineer  would  mean  noth- 
ing; the  elected  officer  almost  certainly  would  be 
incompetent  for  his  work,  and  the  same  applies 
to  every  other  profession.  Thus,  where  pro- 
fessional qualification  is  required  by  the  office, 
popular  election  is  impossible.  But  professional 
qualification  is  required  for  practically  every 
officer  within  the  industrial  organization;  nay, 
some  qualification — professional,  physical,  or 
otherwise — is  needed  for  almost  every  indus- 
trial position,  from  the  unskilled  laborer  to  the 
president,  and  popular  election  thus  is  impossi- 
ble for  any  industrial  position.    It  would  mean 

169 


AMERICA  AND  THE  NEW   EPOCH 

something  only  if  every  elector  can  personally 
satisfy  himself  that  the  candidate  has  the  re- 
quired qualifications,  and  this  is  not  possible, 
since  no  elector  can  judge  on  the  qualification 
of  every  position,  and  if  he  could  the  mere 
amount  of  time  required  to  do  so  would  exclude 
the  possibility. 

Granting,  as  the  fundamental  principle  of 
democracy,  that  every  citizen  has  the  same 
right,  the  same  voice  and  vote  in  the  Government 
— and  no  nation  like  ours  can  continue  success- 
ful without  conceding  this  fundamental  prin- 
ciple— it  means  that  popular  vote  by  majority 
must  decide  all  general  questions,  all  matters  of 
policy  which  are  of  interest  to  every  citizen, 
which  every  citizen  can  discuss  and  judge,  such 
as  the  questions  whether  women  should  vote  as 
well  as  men,  whether  our  nation  is  ready  and 
willing  to  police  our  entire  continent  and  force 
its  unruly  Spanish-American  republics  to  keep 
order  and  peace;  but  majority  vote  cannot 
decide  professional  questions  or  questions  of 
fact,  such  as  whether  vaccination  is  necessary 
to  protect  us  against  smallpox  epidemics, 
whether  battle-ships  or  submarines  are  more 
eflFective,  or  whether  some  water-power  can  be 
developed  economically  or  not. 

170 


EVOLUTION:    INDUSTRIAL  GOVERNMENT 

Indeed,  even  the  most  radical  exponent  of 
unlimited  majority  voting  realizes  this.  He  may 
claim  tliat  everything  should  be  done  and  de- 
cided by  the  majority  vote,  ma^^  in  city  gov- 
ernment demand  that  every  administrative  de- 
tail h>i  brought  to  decision  by  majority  vote, 
that  e  very  city  employee  from  the  mayor  to  the 
unskilled  laborer  be  elected;  but  if  he  himself 
is  sick,  he  does  not  go  before  the  political  body 
and  ask  to  elect  a  physician  for  him — but  he 
himself  chooses  a  physician  in  whose  profes- 
sional qualifications  he  has  confidence.  Or  if 
his  child  is  sick  he  would  not  think  of  asking  the 
organization  to  vote  whether  it  is  measles  or 
scarlet  fever,  but  he  takes  the  decision  of  a  single 
physician  in  preference  to  any  majority  vote. 

Should  the  industrial  officials,  then,  be  ap- 
pointed? But  who  appoints  the  appointer.^^ 
Within  certain  limits,  however,  in  offices  re- 
quiring professional  qualifications,  appointment 
gives  better  results.  In  a  medium-sized  town, 
for  instance,  the  administration  may  employ  a 
thousand  people.  If  they  all  were  elected  not 
a  single  elector  could  devote  enough  time  to 
find  out  the  qualifications  of  every  candidate 
for  every  place — even  if  he  were  capable  pro- 
fessionally to  judge  on  it.    The  result  could  be 

171 


AMERICA  AND  THE  NEW  EPOCH 

imagined.  But  the  mayor  can  devote  enough 
time  to  select,  by  investigation  and  consulta- 
tion with  competent  men  in  each  profession, 
reasonably  competent  men  as  heads  of  depart- 
ments; they,  in  the  same  manner,  can  select 
and  appoint  subheads,  and  so  on,  and  a  reason- 
able administrative  efficiency  could  be  secu  red — 
if  the  mayor  is  not  prejudiced  or  led  by  motives 
other  than  administrative  efficiency. 

But  herein  lies  the  weak  point  of  the  method 
of  choosing  officers  by  appointment :  it  is  so  easy 
to  abuse  it  for  selfish  purposes,  for  private  or 
particularistic  interests,  to  select  from  a  narrow 
circle  of  personal  or  political  friends,  to  abuse 
it  for  paying  political  or  private  debts.  Per- 
sonal inclination,  if  not  prejudice  of  the  ap- 
pointing officer,  has  too  large  influence,  and,  at 
the  best,  gradually  the  method  of  appointment 
leads  into  control  of  the  offices  by  a  clique,  a 
political  machine,  or  group. 

Thus  neither  majority  election  nor  appoint- 
ment is  capable  of  giving  efficient  qualified  offi- 
cers, such  as  are  necessary  in  the  complex 
structure  of  modern  industrial  civilization. 

There  remains  a  third  method — to  have  the 
officer  elect  himself  for  the  office,  or,  as  we 
usually  say,  "rise  from  the  ranks."    It  is  the 

172 


EVOLUTION:    INDUSTRIAL  GOVERNMENT 

method  which  has  been  so  successful  in  the 
modern  industrial  corporations,  especially  in 
the  office  force,  and  has  given  it  the  efficient, 
centralized,  and  at  the  same  time  flexible  and 
'  progressive  organization.  It  means  that  largely 
every  employee  makes  his  own  job.  If  he  can 
do  larger  work  than  his  position  requires,  he 
does  it,  as  a  matter  of  course,  and  is  allowed  to 
do  it,  as  it  improves  the  efficiency  of  the  depart- 
D^'-nts  in  which  he  works,  and  thereby  the  rep- 
utation  of  his  superior  officers.  Thereby  he  is 
virtually  in  a  higher  position,  and  the  recogni- 
tion thereof,  by  title  and  pay,  follows  as  a  mat- 
ter of  course.  Thus  we  see  in  progressive  in- 
dustrial corporations  people  rise  to  higher  and 
higher  positions,  beyond  those  at  whose  side 
they  started,  not  by  election,  not  by  appoint- 
ment or  "pull,"  but  by  their  own  work,  intelli- 
gence, and  ability.  Thus  we  also  see,  especially 
in  those  industrial  corporations  which  require 
a  considerable  number  of  skilled  or  professional 
men,  positions  created  or  rather  creating  them- 
selves, and  men  taking  up  work  useful  to  the 
corporation  which  was  not  done  before,  or  not 
done  in  the  same  manner,  and  that  in  the  office 
as  well  as  in  the  shops,  and  in  every  such  corpo- 
ration we  can  find  men  in  offices  which  were 

173 


AMERICA   AND  THE  NEW  EPOCH 

created  for  them — often  will  cease  when  they 
drop  out.  This  is  not  always  realized  by  the 
outsider,  and  it  applies  not  only  to  a  few  excep- 
tional men,  but  to  very  many  in  all  ranks.  It 
gives  a  chance  for  initiative  and  individual 
development  within  the  corporation,  which  is 
now  found  very  rarely  outside,  and  is  one  of 
the  most  important  factors  of  progress. 

Thus  more  and  more  positions  are  filled,  not 
by  appointment  by  a  superior  officer,  but  by 
the  man  starting  to  do  the  work,  doing  it  more 
and  more,  and  so  virtually  electing  himself  into 
the  position — and  the  final  appointment  then 
merely  legalizes  the  established  fact. 

Naturally,  this  is  not  always  the  case,  but 
equally  often  some  man  who  shows  qualifica- 
tions superior  to  those  required  for  his  position 
is  tried  in  some  entirely  different  higher  posi- 
tion where  these  qualifications  are  desired. 

Thus,  to-day  there  is  no  place  where  the 
chances  are  so  good  for  every  man  to  reach  the 
highest  power,  to  rise  to  the  highest  position 
which  he  is  capable  of  filling,  as  in  the  large  in- 
dustrial corporation. 

Naturally,  we  must  realize,  as  stated  before, 
that  the  corporate  organizations  are  still  crude 
and  imperfect,  and  that  there  are  many  chances 

174 


EVOLUTION:    INDUSTRIAL  GOVERNMENT 

to  "get  lost,"  to  get  into  "dead-alley  positions" 
and  stay  there  forever,  but  this  is  getting  less 
and  less  with  the  increasing  development  of 
the  industrial  corporation.  Increased  efforts  are 
made  to  guard  against  it,  as  it  is  uneconomical 
for  the  corporation  to  use  men  in  positions  in- 
ferior to  those  which  they  could  fill.  Thus  re- 
search laboratories  have  been  established  for 
men  showing  that  they  could  do  valuable  re- 
search work;  new  lines  of  manufacture  started 
because  men  happened  to  be  specially  interested 
and  capable  in  that  direction,  departments  di- 
vided or  consolidated  to  suit  the  personalities 
of  eni})lo3'ees — that  is,  to  use  them  at  their  best 
efficiency — and  the  industrial  corporation  is  far 
from  the  inflexible,  rigid  machine  which  it  ap- 
l)cars  to  the  outsider,  who  is  not  familiar  with 
its  working;  it  is  this  flexibility  which  gives  it 
the  economic  power  and  strength. 

In  the  national  Government  by  the  co- 
operative organization  of  corporations,  there 
could  thus  be  no  election  of  officers,  nor  ap- 
pointment, but  the  offices  would  fill  them- 
selves by  men  rising  into  them,  following  the 
best  practice  of  our  present  corporations.  The 
men  interested  in  engineering  would  naturally 

drift    into    engineering    positions,    those    with 
^^  175 


AMERICA  AND  THE  NEW  EPOCH 

administrative  ability  into  administrative  po- 
sitions; those  with  knowledge  and  experience 
beyond  the  individual  industry,  into  the  field 
of  correlation  between  the  industries;  the  most 
capable  organizers  finally  into  the  industrial 
senate.  The  whole  organism  would  be  essen- 
tially self-governing,  consisting  of  a  number  of 
groups  and  sub-groups,  and  further  sub-groups 
within  the  latter,  each  self-governing  within  its 
own  activities,  supreme  within  its  own  field  of 
activity,  subordinate  in  any  other  activity  to 
the  group  into  which  the  other  activity  be- 
longs, and  correlated  with  any  co-ordinate 
group  through  joint  committees  or  through  the 
larger  group  of  which  both  are  parts. 

There  is  nothing  new  in  such  organization, 
but  it  is  in  existence  to-day  in  many  larger 
corporations,  is  the  outgrowth  of  economic 
laws  working  on  the  individualistic  tempera- 
ment of  our  nation.  It  is  essentially  demo- 
cratic in  character;  there  is  no  autocratic  au- 
thority, but  every  member  of  the  organization 
has  a  directive  power  within  his  field  of  activity. 
I  have  seen  large  contracts  decided  or  modified 
by  the  opinion  of  a  workman  in  the  shops,  who 
had  to  state  whether  a  particular  operation 
could  be  done  easily  or  was  difficult. 


XIV 

evolution:  inhibitory  power 

THE  industrial  corporation  of  to-day  is  or- 
ganized for  effective  constructive  work;  it 
has  developed  the  characteristics  necessary  for 
economic  efficiency — continuity  of  organization 
and  at  the  same  time  flexibility  to  adapt  itself 
in  a  high  degree  to  the  requirements  of  indus- 
trial production,  and  to  the  personality  of  its 
members;  it  has  within  itself  the  responsibility 
of  the  individual  toward  the  whole,  and  encour- 
ages initiative  and  individualistic  development 
as  important  factors  of  industrial  progress,  and 
especially  it  has  solved  the  problem  of  filling 
the  offices  with  competent  and  qualified  men. 
Neither  the  political  Government  nor  any  other 
organization  has  these  characteristics,  and  it 
therefore  appears  the  natural  and  most  logical 
step  that  the  executive  and  administrative  Gov- 
ernment of  our  nation  in  the  co-operative  era 

177 


AMERICA  AND  THE   NEW   EPOCH 

which  we  are  now  entering  should  evolve  from 
the  industrial  corporation. 

Such  organization  is  commensal — that  is, 
every  member  of  it  gives  and  receives,  and  the 
maintenance  and  advance  of  the  organization 
thus  is  to  everybody's  interest.  It  thus  should 
form  a  stable  and  permanent  form  of  society, 
permanent  at  least  as  long  as  the  foundation  of 
our  civilization  endures,  as  stable  as  was  tlie 
classic  age  or  the  feudal  age  of  human  society, 
and  not  self-destructive  by  its  own  success,  as 
was  the  individualistic  age.  At  least,  so  it 
appears. 

It  might  be  called  an  aristocratic  democracy, 
using  the  term  aristocratic  in  its  original  mean- 
ing, that  the  influence  of  the  individual  on  so- 
ciety should  be  proportional  to  his  capacity — 
democratic;  everybody  has  the  same  chance, 
the  same  right,  and  there  is  no  discrimination — 
egalite;  everybody  is  free  to  choose  his  ac- 
tivity, to  develop  his  individuality  —  liberie; 
everybody  is  guaranteed  in  his  standard  of 
living,  as  a  matter  of  necessity,  as  otherwise  the 
organization  would  not  be  commensal,  and 
could  not  exist,  but  the  present  indifference  and 
antagonism  of  the  "proletarian"  would  remain 
— fraternite. 

178 


EVOLUTION:    INHIBITORY   POWER 

But  who  guarantees  that  the  industrial  gov- 
ernment remains  commensal  and  that  the 
higher  officers  do  not  develop  into  an  oligarchy, 
a  i)atriciate,  or  nobility;  exclude  all  individuals 
from  the  lower  ranks,  no  matter  how  competent, 
from  the  higher  offices,  and  reserve  the  offices 
for  their  own  descendants,  no  matter  how  in- 
competent? 

It  must  be  realized  that  by  the  law  of  heredity 
— which  holds  for  the  average,  however  excep- 
tional an  individual  may  be — the  son  of  the 
prominent  man  starts,  and  always  will  start, 
with  better  chances  of  success  than  the  son  of 
the  poor  and  uneducated,  even  if  every  other 
condition  is  the  same,  no  preference  given  to 
the  former,  but  both  treated  entirely  on  their 
merits.  The  law  of  inheritance,  in  its  broadest 
sense,  means  that  the  offspring  of  the  highly 
educated,  intelligent  prominent  man  has  inher- 
ited some  of  his  parent's  ability,  absorbed  some 
more  in  his  early  years  from  his  parents,  his 
surroundings,  that  his  education  is  watched  by 
more  qualified  parents,  thus  better  directed  and 
more  efficient,  and  thus — if  not  spoiled  by  op- 
portunity and  becoming  a  failure,  he  should  be 
expected  to  rise  farther  than  the  offspring  of 
parents  who  cannot  give  him  the  same  oppor- 

179 


AMERICA  AND  THE  NEW  EPOCH 

tunities.  Thus,  in  all  fairness,  we  must  expect 
more  of  descendants  of  prominent  parents  than 
of  obscure  parents  in  the  higher  ranks. 

In  some  respects  this  is  one  of  the  most  con- 
soling features  to  the  masses  of  people  who 
have  not  risen;  more  and  more,  with  the  in- 
creasing complexity  of  civilization,  it  becomes 
difficult  to  qualify  for  higher  places  in  our  in- 
dustrial organism,  without  starting  with  a  first- 
class  education  and  a  more  than  average  intelli- 
gence, and  chance  for  a  man,  starting  from  the 
bottom  of  the  ladder,  to  rise  to  great  heights 
thus  becomes  increasingly^  less.  But  this  law  of 
inheritance  means  that  while  the  individual, 
starting  from  the  depths,  may  not  rise  very  high, 
whatever  he  accomplishes  is  not  lost,  but  is  a 
gain  for  his  offspring;  they  start  from  a  higher 
plane  than  he  did,  and  thus  will  rise  higher,  and 
if  we  abandon  the  narrow  and  selfish  viewpoint 
of  considering  only  our  own  individual  self,  it 
means  that  everybody,  not  as  individual,  but 
as  family,  through  generations,  has  the  same 
chance  to  rise  to  the  highest  positions  in  indus- 
trial society. ' 

But,  as  stated,  there  is  a  possibility  of  abuse 
of  power  of  lilglier  position,  for  the  benefit  of  the 
"ruling"    families.      An    individual,    or    small 

180 


EVOLUTION:    INHIBITORY   POWER 

group,  could  not  do  this,  as  it  would  be  wiped 
out  by  its  inefficiency;  but  the  entire  society 
may  well  drift  into  such  class  government,  just 
as  individual  corporations  have  drifted  into  the 
control  of  cliques. 

Especially  great  is  this  danger  with  the  finan- 
cial power,  as  financial  power  is  not  inherently 
constructive,  like  industrial  power.  The  finan- 
cial power  controlling  industrial  corporations 
may  be  used  as  one  of  the  greatest  constructive 
organizing  forces  in  bringing  about  co-opera- 
tion, but  it  may  be  abused  as  a  destructive  dis- 
organizing power,  and,  therefore,  it  is  probable 
that  with  the  progress  of  the  co-operative  in- 
dustrial organization  the  industrial  adminis- 
trative powers  will  more  and  more  come  into 
the  foreground,  the  financial  power  become  less 
dominating. 

Thus  such  industrial  government  based  on 
the  development  of  the  corporation  is  not  by 
itself  entirely  safe  against  abuse  drifting  in  and 
destroying  its  efficiency  and  thereby  endanger- 
ing its  existence. 

Thus,  there  must  be  an  inhibitory  power  out- 
side of  the  industrial  government;  a  power  not 
organized  for  constructive  administration  and 
executive  work,  not  capable  to  do  such  work  nor 

181 


AMERICA  AND   THE   NEW  EPOCH 

permitted  to  do  it,  but  invested  with  an  abso- 
lute veto  to  stop  any  Action  of  the  industrial 
senate  which  is  against  the  public's  interest; 
that  is,  which  is  not  commensal — a  Trihuniciaie. 
The  constructive  activities  of  our  industrial 
commonwealth  require  professional  qualifica- 
tions for  their  direction,  and  economic  efficiency 
thus  demands  an  organization  which  reasonably 
assures  such  professional  qualifications.  There 
are,  however,  questions  of  general  policy  which 
have  nothing  to  do  with  professional  qualifica- 
tions, but  where  the  decision  depends  on  the 
personal  preference,  but  is  dictated  by  no 
economic  law,  and  requires  no  special  experi- 
ence or  knowledge.  Such  would,  for  instance, 
be  the  question  whether  the  increasing  efficiency 
of  industrial  production  should  be  utilized  by 
increasing  the  standard  of  living,  or  by  reducing 
the  time  of  work,  or  by  l^olh;  and  this  question 
the  unskilled  laborer  can  decide  just  as  efficiently 
as  the  corporation  president,  as  it  is  merely  a 
question  of  personal  preference.  Such  matters, 
therefore,  must  be  decided  by  majority  vote  of 
all  the  citizens,  and  cannot  safely  be  left  to  an 
industrial  senate  or  other  professional  body 
without  endangering  the  nation.  Of  necessity, 
the   viewpoints   of   men   in   different   positions 

182 


EVOLUTION:    INHIBITORY  POWER 

(llfTer,  and  quite  frequently  the  view  of  the 
majority  of  all  the  citizens  would  differ  from 
that  of  the  industrial  leaders,  and  if  the  latter 
small  minority  should  prevail  it  would  be  the 
end  of  democracy,  the  nation  would  not  be  self- 
governing  any  more  in  accordance  with  the 
wishes  of  the  majority  of  its  citizens,  but  would 
be  under  autocratic  rule  of  a  minority,  and  the 
only  way  by  which  the  majority  could  secure 
its  wishes  would  be  outside  of  the  laws — by 
revolution— just  as  it  did  occur  in  the  great 
French  Revolution,  when  feudalism  had  ceased 
to  be  commensal. 

This  has  nothing  to  do  with  the  question 
whether  the  view  of  the  intellectual  minority  is 
the  preferable  one;  the  majority  is  always  right, 
because  it  is  the  majority — that  is,  if  the  ma- 
jority of  the  people  desire  a  thing,  we,  as  indi- 
viduals, or  as  minority,  have  no  right — and  no 
power,  in  the  long  run — to  set  ourselves  up  as 
judges  and  say  that  we  are  right  and  the  rest 
of  the  world  is  wrong;  we  are  wrong  if  we 
cannot  convince  the  majority  of  the  correctness 
of  our  views. 

Thus  there  must  be,  in  a  democratic  nation, 
an  organization  through  which  the  wishes  of 
the  majority  of  the  citizens  are  expressed  and 

183 


AMERICA  AND  THE  NEW  EPOCH 

carried  out,  an  organization  whereby  the  na- 
tion or  any  of  its  sub-groups,  such  as  the  munic- 
ipality, can  by  majority  vote  settle  the  policies 
under  which  it  desires  to  live,  decide  questions 
such  as  woman  suffrage,  decide  on  war  or  peace, 
on  imperialism  or  particularism,  decide  whether 
the  municipality  wishes  many  civic  improve- 
ments, though  resulting  in  a  high  tax-rate,  or  a 
lovv^  tax-rate  and  no  improvements.  All  these 
matters  are  not  professional  and  industrial,  but 
are  questions  of  policy,  of  viewpoint,  and  thus 
to  be  settled  hy  majoritj^  vote — while  the  exe- 
cution of  the  polic3^  decided  upon  by  such  dem- 
ocratic vote  would  of  necessity  devolve  on  the 
industrial  government  as  the  permanent  ad- 
ministrative organization. 

Such  a  government,  with  superior,  but  general 
and  essentially  negative  powers,  would  gradu- 
ally' develop  from  om*  present  political  govern- 
ment, when  by  the  corporate  organization  of 
the  industries  the  administrative  or  constructive 
government  is  more  and  more  taken  over  by  the 
co-operative  organization  of  the  industries. 

Thus  in  the  natural  course  of  development 
])y  evolution,  from  our  present  industrial  po- 
litical situation,  there  should  evolve — if  not 
checked  by  interference — a  dual  government  of 

18t 


EVOLJTION:    INHIBITORY  POWER 

our  nation  in  the  co-operative  era:  a  construc- 
tive industrial  government,  developed  from  the 
co-operative  organization  of  the  industrial  cor- 
porations; permanent  and  self-perpetuating, 
therefore  consisting  of  the  men  best  qualified 
for  the  direction  of  the  innumerable  different 
activities  of  modern  civilization. 

An  inhibitory  power,  the  development  of  our 
present  political  government,  elected  at  fre- 
quent intervals  by  the  majority  vote  of  all  the 
citizens,  having  general  supervisory  power,  the 
decision  on  national  policies,  and  the  absolute 
veto,  but  having  no  administrative  or  execu- 
tive power;  but  the  latter  is  entirely  vested  in 
the  positive  government,  the  industrial  senate, 
while  the  political  government  with  its  national 
and  local  officers  is  entirely  negative. 

Such  a  dual  government,  a  positive  con- 
structive one  and  a  negative,  inhibitory  one, 
is  not  a  new  idea  in  the  world's  history;  it  has 
existed  once,  and  has  been  the  most  successful 
and  most  efficient  government  the  world  has 
ever  seen — the  government  of  the  Roman  Re- 
public. The  Roman  Senate,  with  its  officers, 
consuls,  pra?tors,  etc.,  was  the  j^ositive  power, 
in  charge  of  the  executive,  administration,  and 
legislation   of   the   republic,   and   the  Senators 

185 


AMERICA  AND   THE   NEW  i,FOCH 

were  not  elected  nor  appointed,  but  were  the 
representatives  of  the  various  national  interests, 
at  that  time  mainly  agricultural  and  commer- 
cial, while  now  they  would  be  industrial.  The 
people's  tribunes  represented  the  negative,  in- 
hibitory power;  they  had  the  absolute  veto 
and  thereby  were  superior  to  all  other  officers. 
But  they  had  no  executive  or  administrative 
power.  They  were  the  only  officials  elected  by 
all  the  people.  The  inscription  on  the  Roman 
standards,  "S.  P.  Q.  R.,"  well  represented  the 
character  of  this  dual  government:  " Senatus 
Populusque  Romanus,''  "The  Senate  and  thus 
the  Roman  People." 

This  government  finally  failed  in  the  Roman 
Republic,  by  the  tribuniciate  degenerating  and 
the  Senate  then  drifting  into  selfish  interests,  as 
class-  government.  But  the  tribuniciate  failed 
because  the  means  of  communication  in  those 
days  were  insufficient.  With  the  expansion  of 
the  rej)ublic  over  larger  territory  it  became  im- 
possible for  all  the  citizens  to  take  part  in  the 
election  of  the  tribunes,  but  only  the  population 
of  the  capital  could  attend  the  election,  and  this 
was  rather  the  least  desirable  part  of  the  popu- 
lation. Thus  the  tribunes  ceased  to  be  the 
representatives    of    all    the    people,    lost    their 

18G 


EVOLUTION:    INHIBITORY   POWER 

prestige,  and  finally  their  power  over  the  Senate 
(Gracchus-Sulpicius),  and  the  Senate  became 
the  representative  of  special  interest,  until 
finally  militarism  (Mariiis)  and  its  natural 
consequence,  Coesarism  (Sulla,  Caesar),  ended 
the  republic. 

But  the  foundation  laid  by  this  dual  republi- 
can government  carried  the  state  onward  by 
its  momentum,  long  after  the  republican  gov- 
ernment had  ended,  to  the  dominion  of  the 
world,  and  held  for  three  centuries  the  entire 
civilized  world  in  peace  and  prosperity,  until 
there  was  nothing  left  of  the  classic  civilization 
but  a  hollow  shell  which  crumbled  before  the 
onslaught  of  the  barbarians. 

Thus  the  government  of  the  Roman  Republic, 
the  greatest  governmental  structure  which  the 
world  has  ever  seen,  was  the  same  in  principle 
as  the  dual  government,  of  permanent  adminis- 
trative and  democratic  inhibitory  power,  toward 
which  we  are  now  drifting. 


XV 

THE  AMERICAN   NATION 

CO-OPERATIVE  industrial  organization 
presupposes  racial  unity.  There  can  be 
no  co-operation  as  long  as  there  is  racial  strife 
and  antagonism  within  the  nation.  The  Ameri- 
can nation  was  formed— rather  is  being  formed, 
since  it  is  still  in  the  formation  period — by  the 
commingling  of  the  Anglo-Saxon,  Teuton,  Celt, 
Slav,  and  Mediterranean.  None  of  these  races 
is  in  the  majority  or  even  in  such  a  large  mi- 
nority that  it  could  expect  to  have  its  character, 
its  viewpoints,  habits,  and  temperament  pre- 
dominate in  the  resultant  race.  The  white  pop- 
ulation of  the  United  States  to-day  probably 
comprises  about  30  to  35  per  cent,  of  Anglo- 
Saxon  origin  (English,  Scotch,  etc.),  about  30 
per  cent,  of  Teuton  origin  (German,  Dutch, 
Scandinavian,  etc.),  15  per  cent,  of  Celtic  origin 
(Irish),  and  20  to  25  per  cent.  Slav  and  Mediter- 

188 


THE  AMERICAN  NATION 

ranean.  Of  the  latter,  the  latest  immigrants, 
many  are  not  yet  citizens. 

The  American  race  thus  cannot  be  Anglo- 
Saxon,  or  Teuton,  or  Irish,  or  Slav,  or  Latin, 
but  nuist  have  characteristics  of  all  these  races, 
and  to  talk  about  "blood  is  thicker  than  water," 
and  apply  this  to  "our  British  cousins,"  or  speak 
of  Germany  as  "Fatherland,"  or  of  our  country 
as  a  "Greater  Ireland,"  this  is  not  American 
citizenship,  but  is  racial  sectarianism,  and  as 
such  to  be  condemned  as  reprehensible,  since  it 
retards  the  bringing  about  of  the  racial  unity 
which  is  the  first  and  fundamental  requirement 
of  a  stable  nation. 

On  the  other  hand,  it  must  be  recognized  that 
the  Anglo-Saxon,  or,  more  correctly  speaking, 
the  English,  have  an  exceptional  position  in  our 
race,  as  the  original  and  oldest  constituent. 
While  all  races  contributed  in  the  early  coloni- 
zation of  the  Atlantic  coast,  nevertheless  the 
British  were  so  much  in  the  majority  that  in 
the  Colonial  days,  and  even  still  in  the  first 
part  of  the  nineteenth  century  the  United 
States  were  essentially  Anglo-Saxon,  that  is,  the 
citizens  of  British  descent  were  in  the  majority. 
But  the  great  German  and  Irish  immigration  of 
the  middle  of  the  nineteenth  century  and  the 

18!) 


AMERICA  AND  THE  NEW  EPOCH 

tendency  of  the  descendants  of  the  early  Col- 
onists toward  race  suicide  changed  this,  and 
America  is  not  Anglo-Saxon  any  more,  but  is  a 
mixed  race  in  formation.  What  might  have 
happened  if  the  gates  had  been  closed  to  immi- 
gration early  in  the  nineteenth  century,  and  the 
non-Anglo-Saxon  races  kept  out,  does  not  con- 
cern us  now  any  more;  history  deals  with  what 
is,  and  not  what  has  been  or  what  might  have 
been;    deals  witli  facts,  not  with  sentiments. 

The  English  language  has  conquered  and 
through  it  the  United  States  are  closely  related 
to  England  by  a  common  language,  common 
forms  of  expression  and  intercommunication, 
and  a  common  literature,  so  much  so  that  with 
many  writers  it  is  difficult  to  say  whether  they 
are  British  or  American.  In  some  respects  it 
must,  therefore,  be  regretted  that  the  complete 
racial  unity  of  the  two  English-speaking  nations 
has  not  been  preserved,  that  America  has  not 
remained  completely  of  Anglo-Saxon  race. 

On  the  other  hand,  however,  it  must  be  real- 
ized that  it  was  the  mixed  races  which  have 
done  the  world's  work,  which  have  led  in  all 
human  advance,  and  it  was  the  vitality  given 
by  the  mixture  of  races  which  has  created  all 

great  nations.     Thus  England  as  a  nation  was 

lyo 


THE   AMERICAN   NATION 

formed  by  the  mix  Lure  oi"  the  Norman  and  the 
Anglo-Saxon;  France  by  the  Celt,  Roman,  and 
Frank;  far  back  before  history,  tradition  tells 
of  the  creation  of  the  Roman  nation  bj^  the  tri- 
union  of  tribes — even  the  name  "tribe"  con- 
tains the  root  "three,"  in  memory  of  this 
formation  of  the  Roman  nation  from  three 
branches. 

Thus  there  is  no  doubt  that  had  it  not  been 
for  the  mixture  of  the  various  leading  races  of 
the  world  America  would  not  be  what  it  is 
to-day.  We  can  easily  realize  this  by  review- 
ing the  racial  characteristics-  of  the  foremost 
races  which  contributed  to  the  American  union. 

The  characteristic  of  the  Anglo-Saxon  is  his 
great  initiative.  He  is  the  empire-builder.  We 
only  need  to  think  of  names  like  Hastings, 
Washington,  Nelson,  Gordon,  Rhodes,  Kitch- 
ener, etc.  To  him  thus  is  due  the  push  and  the 
energy  which  have  opened  up  and  conquered  the 
New  World.  We  see  it  in  the  rapid  growth  of 
the  English  colonies,  compared  with  the  slow 
growth  of  other  nations'  colonies.  But  charac- 
teristic of  the  Anglo-Saxon  also  is  the  excessive; 
individualism  which  handicaps  him  in  co- 
operation, and  co-operation  more  and  more 
becomes  the  essential  of  progress.     Thus  the 


13 


191 


AMERICA  AND   THE   NEW   EPOCH 

Anglo-Saxons  are  not  prominent  as  organizers, 
but  rather  are  likely  to  be  muddlers;  the  pres- 
ent world's  war  affords  an  excellent  illustration 
hereof.  Thus  the  Anglo-Saxon  creates  and 
originates,  but  does  not  organize  what  he  cre- 
ated. 

The  Teuton  does  not  have  the  same  initiative 
as  the  Anglo-Saxon;  he  also  is  an  individualist 
— especially  those  of  the  Teuton  races  who 
emigrated  here,  because  their  individualistic 
ideas  did  not  conform  to  the  governments  under 
which  they  had  lived  in  Europe — but  the  in- 
dividualistic nature  of  the  Teuton  is  tempered 
and  controlled  to  a  considerable  extent  by  a 
collective  or  co-operative  temperament.  As 
the  result,  the  Teutons,  by  their  racial  charac- 
teristics, are  the  great  organizers.  We  only 
need,  in  the  history  of  our  nation,  think  of  a 
few  names  as  Astor,  Goethals,  Guggenheim, 
Harriman,  Roosevelt,  Schijff,  Schuster,  Schwab, 
Strauss,  Vanderbilt,  Vanderlip,  Warburg,  Wey- 
erhausser,  Rockefeller,  Wanamaker,  etc. 

Characteristic  of  the  Celtic  race  is  the  strong 
collectivistic  temperament,  associated  with  an 
individualistic  nature,  which  specially  fits  them 
as  administrators.  It  is  the  Celt  who  is  most 
proficient  to  rule  as  boss  by  the  consent  of  the 


THE  AMERICAN  NATION 

governed,  not  as  disciplinarian  by  orders  which 
his  subordinates  have  to  obey,  but  by  giving 
the  conception  of  primus  inter  pares.  Thus  he 
has  been  most  successful  in  politics,  while  the 
individualistic  Anglo-Saxon  necessarily  is  much 
less  successful  in  this  activity.  It  is  charac- 
teristic that  America's  largest  city  has  been 
ruled  almost  uninterruptedly  by  the  Celtic  race, 
and  that,  in  the  rare  instances  where  a  "reform 
government"  succeeded  to  carry  New  York,  it 
was  such  a  failure  that  it  always  was  wiped  out 
at  the  next  election.  Also,  look  around  es- 
pecially among  those  corporations  which  by 
their  close  relationship  with  large  numbers  of 
the  public  require  a  specially  high  grade  of 
social  sense  in  their  management — public  utility 
corporations — and  you  find  an  abnormally  large 
number  of  Irish  names  among  their  leaders. 

And  how  about  the  contribution  to  America 
by  the  other  races,  outside  of  these  three  leading 
civilized  races  of  to-day?  Do  not  let  us  forget 
that  the  greatest  of  all  Americans  was  neither 
Anglo-Saxon  nor  Teuton;  nay,  was  not  even 
Aryan,  but  was  of  the  Turanian  race — Abe 
Lincoln. 

The  three  great  races  which  contributed  to 

the  American  citizenshiji  of  to-day  are  supple- 

19;} 


AMERICA  AND  THE   NEW  EPOCH 

mentary,  commensal — originator,  organizer,  ad- 
ministrator— jointly  they  have  made  our  com- 
monwealth, and  any  split  between  them  means 
disaster.  The  Anglo-Saxon  alone,  without  the 
co-operation  of  the  Celt  and  German,  may 
originate,  but  probably  would  not  accomplish 
much  more  than  a  chaotic  muddle — somewhat 
of  this  we  have  seen  in  the  last  year  in  our 
country.  On  the  other  hand,  with  the  Teuton 
and  Celt  alone,  without  the  Anglo-Saxon, 
progress  would  slow  down  for  lack  of  initiative. 

There  really  never  was  a  serious  racial  an- 
tagonism in  our  country.  It  is  true,  during  the 
century  of  immigration  the  "native"  has  looked 
down  on  the  "Dutchy,"  he  then  in  turn  on  the 
"Mike,"  and  again  on  the  "Dago,"  etc.,  but 
only  the  names  were  racial,  the  antagonism  was 
not  racial,  but  that  of  the  previous  immigrant 
toward  the  lower  standard  of  living  of  the  later 
comer,  who  threatened  the  higher  standard  of 
living  acquired  by  the  former,  and  as  quickly  as 
the  new  immigrant  acquired  the  American 
standard  of  living  and  thereby  ceased  to  be 
a  danger  in  lowering  the  standard,  the  antag- 
onism disappeared. 

Politically,  racial  hatred  has  found  an  expres- 
sion only  once  in  our  country,  in  the  notorious 

194 


THE  AMERICAN  NATION 

Know-Nothing  party  of  a  past  generation;  but, 
unfortunately,  there  is  at  present  some  danger 
of  a  revival  of  racial  antagonism,  and  this  would 
be  a  national  calamity,  as  our  nation  needs  the 
friendly  co-operation  of  all  the  races  which  have 
contributed  to  the  coming  American  race. 

All  the  nations  which  are  involved  in  the  pres- 
ent world's  war  have  contributed  to  the  immi- 
gration which  has  formed  the  American  citi- 
zenship of  to-day,  and  it  is  natural  to  expect, 
however  much  the  immigrants  and  their  de- 
scendants have  become  true  Americans,  that 
they  should  have  some  sentimental  attachment 
or  sympathy  for  the  nation  of  their  forefathers. 
Indeed,  a  type  of  mind  which  in  one  or  two 
generations  can  lose  all  attachment  for  his  an- 
cestors' nation  is  not  the  type  of  mind  from 
which  to  build  a  strong  and  enduring  nation, 
is  not  the  type  of  mind  which  we  want  here 
m  America;  in  England,  after  [nearly  a  thou- 
sand years,  the  Norman  and  the  Anglo-Saxon 
type  are  still  distinguishable. 

Thus  it  is  natural  and  proper  that  American 
citizens  of  English  descent  should  largely  sym- 
pathize with  England,  American  citizens  of 
German  descent  with  Germany,  American  citi- 
zens of  Irish  descent  wish  England's  defeat,  etc. 

195 


AMERICA  AND  THE  NEW  EPOCH 

This  has  nothing  to  do  with  their  duty  as 
American  citizens,  with  their  allegiance  first, 
last,  and  always,  toward  America. 

Unfortunately,  an  American  expatriate  raised 
the  cry  of  "hyphenate,"  and  an  influential  press, 
misguided  by  business  interests,  took  it  up,  and 
finally  in  the  utterances  of  extremists — among 
them,  unfortunately,  some  politically  very 
prominent  men — it  reached  the  ultra  Know- 
Nothing  attitude  that  "only  a  citizen  of  British 
descent  can  be  a  real  true  American,  and  any- 
body not  of  Anglo-Saxon  descent  cannot  have 
the  type  of  mind  which  is  required  for  an 
American  citizen." 

With  this  it  became  a  national  menace,  for  it 
challenged  the  right  to  citizenship  of  the  ma- 
jority of  our  nation,  as  the  majority  is  not 
Anglo-Saxon  any  more.  Naturally,  all  political 
differences,  all  issues  between  the  various  politi- 
cal parties,  became  secondary  in  importance  be- 
fore the  defense  of  the  right  to  citizenship  of  the 
majorit^^  of  our  present  citizens.  As  seen,  it  is 
a  very  dangerous  and  very  unfortunate  political 
issue,  which  has  been  raised  thus  inadvertently 
by  [)oliticians  playing  to  temporary  excitement 
of  racial  prejudice. 

Such   vicious   attempts   of   making   political 

19G 


THE  AMERICAN  NATION 

capital  by  creating  racial  hatred  within  our 
nation  should  promptly  be  squashed  by  all  fair- 
minded  citizens.  It  is  obvious  that  all  Ameri- 
cans— with  the  exception,  perhaps,  of  the  red 
Indian — are  hyphenates;  that  there  are  un- 
undoubtedly  a  few — a  very  few — British-Amer- 
icans who  are  more  Englishmen  than  Americans, 
German-Americans  who  are  more  Germans  than 
Americans,  etc.,  but  that  the  overwhelming 
majority  of  all  the  British-Americans,  German- 
Americans,  Irish-Americans,  etc.,  are  Americans 
and  nothing  else. 

But  some  good  features  the  raising  of  this 
issue  has  produced :  it  has  shown  the  anachron- 
ism in  many  of  our  conceptions  and  forms  of 
speech.  We  have  been  talking  of  the  native- 
born  Americans  "assimilating"  the  immigrants. 
There  can  be  no  such  thing;  assimilation  im- 
plies two  parties  becoming  similar,  but  implies 
both  changing.  Thus  the  native  does  not  assim- 
ilate the  immigrant,  but  native  and  immigrant 
assimilate  with  each  other,  and  the  native  as 
well  as  the  immigrant  changes,  fortunately,  for 
it  would  be  a  sad  America  if  we  still  hanged 
witches  as  the  Puritan  "natives"  did,  if  we  still 
had  the  Blue  Laws  and  the  religious  intolerance 
of  the  old  New-Englanders.     Or  we  may  say, 

197 


AMERICA  AND  THE  NEW   EPOCH 

"America  assimilates  all  the  immigrants  coming 
to  its  shores  into  a  new,  American  nation." 
But  this  nation  is  not  like  the  Puritan,  or  the 
Dutchman  of  New  Amsterdam,  or  the  German 
of  '48,  but  has,  more  or  less,  the  characteristics 
of  all  of  these. 

Thus,  when  we  speak  of  America  as  the 
melting-pot  of  the  nations  we  must  realize  that 
in  melting  together  different  metals  the  alloy 
is  not  like  any  one  of  the  metals  put  into  the 
pot,  and  thus  we  must  not  expect  that  the  prod- 
uct coming  out  of  the  melting-pot  of  the  nations 
will  be  in  temperament  and  characteristic  like 
the  British-American,  will  have  the  British  view- 
point— or  that  of  any  other  constituent  nation — 
however  much  this  may  disappoint  us. 

Inversely,  however,  we  must  realize  that  the 
Anglo-Saxon  strain  is  one  of  the  largest  in  the 
composition  of  the  American  race;  that  his- 
torically, by  the  previous  preponderance  of  the 
Anglo-Saxon,  it  has  exerted  more  influence  on 
the  molding  of  the  new  nation  than  any  other 
race,  and  that,  therefore,  at  least  for  some  time 
to  come,  Anglo-Saxon  characteristics  should  be 
more  prominent  than  those  of  any  other  race; 
but  they  cannot  be  predominant. 


XVI 

THE   FUTURE   CORPORATION 

THE  development  of  a  national  government 
by  the  industrial  corporation  presupposes 
that  the  social  functions  of  the  industrial  cor- 
poration, which  are  now  being  developed,  have 
been  extended  in  all  corporations  and  grown  to 
an  activity  equal  in  importance  and  scope,  and 
directed  by  equally  big  men,  as  the  technical, 
administrative,  and  financial  activities  of  the 
corporation.  It  would  hardly  be  safe,  even  with 
the  control  exerted  by  an  inhibitory  tribunicial 
power,  to  intrust  the  entire  constructive  gov- 
ernment of  our  nation  to  the  industrial  cor- 
porations of  to-day,  with  their  very  different 
stages  of  social  development. 

For  the  small  individual  producer  of  bygone 
days  there  was  no  social  responsibility  or  duty, 
but  his  business  was  his  private  property^  to 
carry  on  in  any  manner  he  liked,  subordinate 

only  to  the  national  laws.    But  when  the  indus- 
199      — 


AMERICA  AND  THE  NEW  EPOCH 

tries  became  organized  in  larger  and  larger  cor- 
porations, and,  as  inevitably  must  be  the  case 
with  the  continuing  industrial  deveTopment  of 
our  nation,  industries  and  groups  of  industries 
become  essentiall3^  controlled  by  corporations, 
and  the  corporation  comprises  the  joint  pro- 
ductive activity  of  many  thousands  of  em- 
ployees, then  a  social  responsibility^,  and  with 
it  a  social  duty,  arises  in  the  corporation,  and 
the  corporation  can  no  more  be  entirely  private 
property,  however  much  its  legal  owners  may 
consider  it  such.  In  organized  society  there  can 
be  no  unrestricted  private  property  in  any- 
thing which  may  affect  or  influence  public  wel- 
fare and  public  interest.  This  is,  and  always 
has  been,  the  law  of  every  civilized  community. 
Thus  with  the  growth  of  the  corporation,  a  new 
relation  of  mutual  responsibility  with  the  public 
arises.  This  is  fully  recognized  by  all  the  more 
progressive  and  thus  more  successful  corpora- 
tions, and  its  recognition  is  the  foundation  of 
the  rapidly  increasing  activities  of  the  corpora- 
tions in  social  relation  with  their  employees, 
with  the  public  at  large,  with  educational  sys- 
tems and  institutions,  public  policy  committees, 
national  associations,  etc. 

Politically,  the  issue  was  first  raised  in  the 

200 


THE   FUTURE   CORrORATION 

great  coal  strike,  when  the  President  of  the 
United  States  forced  the  contending  parties  to 
arbitrate,  and  since  that  time  the  responsibihty 
of  the  hirge  industrial  organizations  to  the  na- 
tion has  been  universally  established,  has  been 
recognized  as  a  part  of  our  law. 

But,  unfortunately,  there  arc  still  a  few  large 
and  powerful  corporations  which  more  or  less 
refuse  to  recognize  their  social  responsibility  to 
society,  which  insist  that  they  are  private  prop- 
erty, responsible  to  nobody  but  their  stock- 
holders, and  attempt  in  their  actions  toward  the 
public  to  carry  out  this  policy.  It  is  these  cor- 
porations which  continuously  feed  fuel  to  the 
public  hostility  toward  corporations,  which 
undo  what  is  being  accomplished  in  establish- 
ing better  relations  between  corporations,  em- 
ployees, and  public  by  those  corporations  who 
are  realizing  their  social  responsibility  and  liv- 
ing up  to  it — and  which  latter  thus  inversely 
would  gradually  bring  the  public  to  a  realization 
of  its  social  responsibility  toward  the  corpora- 
tion as  modern  industry's  most  successful 
embodiment. 

Illustrations  of  this  can  be  seen  in  the  dealing 
of  corporations  with  the  complaints  of  the  pub- 
lic;   from  corporations  which  discourage  com- 

201 


AMERICA  AND  THE   NEW   EPOCH 

plaints,  whether  just  or  unjust,  by  any  means, 
apparently  endeavor  to  make  it  as  inconvenient 
and  uncomfortable  to  the  complainant  as  pos- 
sible, to  make  him  feel  like  a  criminal,  and 
thereby  effectively  discourage  any  further  com- 
plaint. With  such  corporations  nobody  who 
once  made  a  complaint  will  ever  like  to  make 
another  complaint,  but  neither  will  he  ever 
have  a  good  word  for  the  corporation,  but  can 
be  counted  forever  after  among  its  enemies. 

Then  there  are  powerful  utility  corporations, 
which  make  the  complaint  department  a  careful 
study  of  their  best  men,  select  qualified  officers 
with  considerable  social  sense  for  handling 
complaints;  they  encourage  complaints,  show 
the  complainant  attention,  explain  to  him  the 
why  and  wherefore,  and  in  nine  cases  out  of 
ten  leave  him  not  merely  satisfied,  but  a  friend 
and  defender  of  the  corporation,  and  they  find 
that  this  method  of  dealing  with  complaints, 
while  it  may  cost  more  than  merely  discourag- 
ing complaints  by  inattention,  will  pay  for  itself 
as  one  of  the  most  effective  means  of  creating 
friends  for  the  corporation  among  the  public. 

Again,  there  are  eorj)orations,  stores,  hotels, 
etc.,  whose  principle  in  dealing  with  comi)laints 
is  that  the  complainant  is  always  right,  their 

202 


THE  FUTURE  CORPORATION 

own  employee  wrong;  it  is  unfairness  in  the 
opposite  direction,  unjust  to  their  own  em- 
ployees, and  often  ineffective  toward  the  com- 
plainant, who,  as  a  rule,  is  more  satisfied  by 
being  given  reasons  and  explanations  rather 
than  by  being  told  that  the  employee  will  be 
punished. 

The  same  applies  to  claims,  and  to  practically 
every  activity  in  which  the  corporation  comes 
into  contact  with  the  public;  we  find  all  kinds 
of  attitudes,  from  the  alleged  "the  public  be 

d d,"   to  that  of  the  modern   corporation 

against  which  no  justified  hostility  could  ever 
have  arisen  even  by  the  most  exacting. 

The  future  success  of  our  country  as  industrial 
nation  depends  on  the  extent  to  which  co- 
operation can  be  developed  within  the  industrial 
corporation,  and  between  public  and  corpora- 
tion. This  is  realized  more  and  more,  and  in- 
creasing efforts  are  made  to  bring  about  co- 
operation. Thus,  in  most  modern  corporations 
some  work  is  done  to  establish  co-operation,  in 
some  much  time  and  attention  are  devoted 
hereto  by  the  highest  officials. 

Unfortunately,  due  to  the  strong  individual- 
istic temperament  of  most  corporation  leaders, 
many  of  these  activities  are  paternalism  rather 

20.'}  ' 


AMERICA  AND  THE  NEW  EPOCH 

than  true  co-operation.  Co-operation  implies 
two  parties  coming  together.  Thus  there  may 
be  co-operation  between  employer  and  employ- 
ees, co-operation  between  the  public  and  the 
corporation;  but  co-operation  of  the  employees 
with  the  employer  in  plans  devised  and  intro- 
duced by  the  employer,  of  the  public  with  the 
corporation  on  a  basis  established  solely  by  the 
corporation,  is  a  misnomer,  and  such  one-sided 
attempts  of  co-operation  not  infrequently  lead 
to  the  reverse,  to  strained  relations  and  antag- 
onism, and  that  naturally,  in  a  democratic  na- 
tion, where  everybody  believes  that  he  knows 
best  what  is  good  for  him. 

Thus  there  are  instances  of  corporations,  still 
essentially  controlled  by  one  man,  who  created 
and  originated  the  business,  and  who  was 
deeply  interested  in  the  welfare  of  his  employees, 
where  extensive  social  work  was  done  for  the 
employees,  often  under  the  immediate  personal 
supervision  of  the  owner  of  the  corporation. 
Excellent  sanitary  facilities,  recreation-rooms,  li- 
braries and  reading-rooms,  lectures  and  lecture- 
rooms,  gynmasium  and  athletic  fields,  social 
centers  and  lounging-rooms,  parks  and  play- 
grounds, in  short,  anything  that  could  make  the 
employees  happy  and  contented,  were  provided 

204 


THE   FUTURE   CORPORATION 

by  the  corporation,  regardless  of  expense,  and 
quite  likely  the  thanks  was  a  general  strike  for 
some  petty  reason,  such  as  that  the  towels  in 
the  toilet-rooms  were  washed  in  a  non-union 
laundry.  The  consequence  naturally  was  a 
thorough  discouragement  of  the  corporation 
owner,  over  the  utter  lack  of  appreciation  and 
thanklessness  of  the  emploj^ees.  But  was  this 
justified?  Or  was  not  the  entire  social  activity 
a  violation  of  the  fundamental  principle  of  co- 
operation?— that  is,  of  working  together,  and 
based  on  the  conception  of  the  business  o\Mier 
that  he  knows  better  what  is  good  for  his  em- 
ploj^ees  than  they  know  themselves — a  con- 
ception which,  even  if  it  should  be  true,  would 
necessarily  lead  to  the  resentment  of  those  who 
by  implication  are  given  to  understand  that 
they  do  not  know  what  is  to  their  interest,  but 
have  to  have  a  guardian. 

This  is  the  most  serious  defect  of  much  of 
to-day's  social  work  in  the  corporation;  it 
deals  with  the  things  which  the  employer 
believes  the  employees  want  or  should  want, 
but  not  what  they  wish,  and  thus  it  is  tainted, 
in  the  opinion  of  the  men,  with  paternalism  and 
charity. 

It  is  true  that  the  corporation  leaders  may, 

205 


AMERICA  AND  THE  NEW  EPOCH 

in  some  respects,  know  better  than  their  em- 
ployees what  is  to  the  interest  of  the  employees ; 
with  the  broader  view  from  their  position  they 
should  know  better.  But  this  does  not  change 
the  situation.  So  does  the  political  boss  in  most 
cases  know  better  what  is  in  the  interest  of  his 
party  than  does  the  individual  party  member; 
but  still  he  does  not  order,  but  persuades  and 
convinces,  otherwise  he  could  not  long  remain 
the  leader.  Now,  in  our  industrial  organiza- 
tions the  most  important  and  most  beneficial 
results  would  be  the  recognition  by  all  the  cor- 
poration employees,  of  the  corporation  leaders 
as  the  leaders  in  the  social  activities  of  the  cor- 
poration. But  this  first  requires  convincing  the 
employees  that  the  social  activity  of  the  corpora- 
tion leaders  is  in  the  employees'  interests.  This 
is  a  very  difficult  problem,  in  view  of  the  ex- 
tensive suspicion  of  employees  against  any  new 
action  of  the  employer.  Unfortunately,  quite 
commonly  the  difficulty  of  the  problem  of  es- 
tablishing social  relation  is  very  imperfectly 
recognized  by  the  corporation  leaders;  compare 
the  letter  written  by  a  corporation  to  some 
prominent  customer  with  the  notice  informing 
the  employees  of  some  social  activity  intro- 
duced by  the  corporation;    the   utmost  care, 


THE  FUTURE  CORPORATION 

which  is  taken  in  the  former  not  to  offend  any — 
whether  just  or  unjust — sensitivity  of  the  cus- 
tomer, while  in  the  latter  letter  often  no  thought 
is  given  to  this  feature  of  form,  but  it  is  assumed 
that  the  employees  should  be  thankful.  But  it 
is  the  corporation  which  introduces  social  ac- 
tivities to  establish  co-operation,  as  it  is  the 
corporation  which,  from  its  broader  view,  sees 
the  necessity  of  greater  co-operation,  while  the 
employees  do  not  see  it  yet,  but  suspect  the  new 
movement  as  hostile  to  their  interest,  and  thus 
need  convincing  that  it  is  not  so,  require  the 
same  careful  consideration  which  is  given  to 
the  particular  and  easily  offended  customer. 

Herein  really  lies  the  weak  point  of  our  pres- 
ent industrial  organization.  Thus,  where  social 
activities  exist,  we  often  have  two  kinds  of  as- 
sociations; both  consist  of  practically  the  same 
employees,  both  are  entirely  free  in  the  election 
of  their  officers,  and  still  entirely  different 
types  of  men  are  elected  in  the  two  organiza- 
tions. In  the  labor  unions,  "demagogues"  and 
"agitators"  may  be  elected,  but  in  the  social 
organization,  the  sick-benefit  societies,  etc.,  the 
same  men  elect  as  officers  good  and  stable- 
minded  conservative  workmen.  Often  when 
seeing   this,    we   deceive   ourselves   about   the 

14  207 


AMERICA  AND  THE  NEW  EPOCH 

"good  sense"  of  the  men,  that  when  their  o^\^l 
money  is  concerned,  in  the  benefit  society,  they 
do  select  good  officers,  even  if  they  allow  agita- 
tors to  run  their  labor  unions.  But,  helas! 
when  some  really  serious  problem  arises,  such 
as  jeopardizing  their  existence  by  a  strike,  it  is 
the  union  officers  whom  they  trust  and  follow, 
not  the  conservative  officers  of  the  social  organ- 
ization, the  benefit  society,  etc. 

What  is  the  meaning  of  this?  Is  it  not  the 
feeling  underlying  in  the  minds  of  the  men  that 
the  labor  union  is  recognized  as  an  employees' 
association,  even  by  those  outside  of  the  union, 
while  the  other  organizations  are  considered  as 
"associations  of  employees  by  the  employers," 
and  as  such  do  not  receive  the  same  interest 
and  confidence;  and  when  choosing  ofiicers  for 
the  latter  organizations  such  men  are  chosen  as 
the  members  believe  the  corporation  would  like 
to  see  chosen.'' 

This  is  the  great  problem  which  has  not  yet 
been  solved  in  bringing  about  co-operation  with- 
in the  corporation;  co-operation  implies  organi- 
zation, and  how  can  organizations,  independent 
and  not  managed  and  controlled  by  the  corpo- 
ration, be  brought  about  which  are  accepted  as 
bona  fide    independent    organizations    of    em- 

208 


THE   FUTURE   CORrORATION 

ployees,  and  not  considered  as  sham  organi- 
zations and  treated  as  such?  A  great  deal  of 
trial  and  failure  will  undoubtedly  be  necessary 
to  solve  this  problem.  Sometimes  an  organiza- 
tion, which  was  treated  listlessly  and  without 
interest  for  years,  picks  up  suddenly  by  some 
men  getting  into  it,  and  then  gets  efficient  and 
recognized  as  independent. 

If  co-operation  could  be  established  between 
the  corporations  and  the  labor  unions,  within  the 
limited  scope  of  those  activities  in  which  the 
two  organizations'  interests  are  plainly  the  same, 
such  arrangement  would  immediately  receive 
the  recognition  of  the  employees  as  truly  co- 
operative. But,  unfortunately,  in  most  places 
the  relations  between  the  two  organizations  are 
too  strained  to  make  such  co-operation  feasible 
and  safe  for  the  corporation.  Furthermore, 
there  is  the  fundamental  difficulty  that  the 
labor  union  is  national  in  scope,  and  the  local 
organization  limited  in  power  and  authority, 
depending  on  the  national  body,  and  it  would 
necessarily  be  difficult  for  a  corporation  to  enter 
into  relations  with  an  organization  which  is  not 
independent. 

The  same  difficulty  of  bringing  about  real  co- 
operation exists  also  between  the  corporations 

209 


AMERICA  AND  THE  NEW  EPOCH 

and  the  general  public.  It  is  the  well-recognized 
defect  of  the  American  business  man,  which  has 
largely  kept  American  business  out  of  the 
world's  market;  disinclination  to  consider  any 
other  viewpoint  but  his  own,  failure  to  con- 
sider the  foreign  customer's  peculiarities,  hab- 
its and  wishes,  and  insistence  on  the  adopted 
"standard"  way  of  doing  business.  Within  our 
country,  less  difficulty  is  experienced,  as  pro- 
ducer and  customer  both  have  similar  habits 
and  methods  of  business.  Trouble  is  liable 
to  arise  only  in  the  dealings  between  private 
and  public  corporations,  such  as  municipalities. 
The  attitude  of  some  private  corporations  in 
making  their  proposition  to  the  municipality  in 
the  form  they  consider  as  just  and  proper,  and 
then  standing  pat  and  refusing  to  consider  any 
other  arrangement,  has  led  more  than  once  to 
unnecessary  controversies — usually  to  the  disad- 
vantage of  the  private  corporation,  as  obvious 
with  the  present  attitude  of  the  public  toward 
the  corporation.  Especially  such  is  liable  to 
occur  with  smaller  corporations,  or  smaller 
branches  of  large  corporations,  which  cannot 
have  sufficiently  broad-minded  men  at  the 
helm. 

The  standard  attitude  of  the  industrial  cor- 

210 


THE  FUTURE  CORPORATION 

poration  has  been,  and  largely  still  is,  to  avoid 
publicity,  that  is,  not  to  give  information  to  the 
public  on  the  actions,  attitude,  and  intentions 
of  the  corporation,  their  reasons  and  causes,  not 
to  explain  and  defend;  in  short,  not  to  make 
any  publicity  campaign,  but  to  endeavor  to  act 
fairly  and  justly  and  business-like,  and  expect 
the  public  to  recognize  and  appreciate  this. 
Probably  by  this  time  most  of  the  corporations 
have  been  thoroughly  disillusioned  in  this  ex- 
pectation, and  a  whole  class  of  literary  men — 
and  women — have  grown  up  making  a  comfort- 
able living  out  of  "kicking  the  corporations." 
To  illustrate:  many  of  those  who  were  in  the 
oil  business  in  the  early  days,  who  tried  to  do 
the  same  as  Standard  Oil  did,  but  did  not  suc- 
ceed where  Standard  Oil  succeeded,  have  been 
hounding  Standard  Oil  for  years,  until  finally 
the  Government  dissolved  Standard  Oil  and  "re- 
stored competition"  by  dividing  it  into  thirty- 
four  competing  companies,  and  so  reduced  the 
price  of  gasoline — and  if  you  do  not  believe  the 
latter,  kick  yourself,  because  there  is  no  more  a 
large  corporation  to  hold  responsible,  as  Stand- 
ard Oil  is  dissolved.  And  so  throughout  the  en- 
tire field  of  industrial  production,  our  Govern- 
ment, backed  by  public  opinion,  is  still  "trust- 

211 


AMERICA  AND  THE  NEW  EPOCH 

busting,"  while  all  other  civilized  nations  are 
organizing  their  industrial  production. 

But  the  industrial  corporation  was  to  a  large 
extent  to  blame  for  the  growth  of  this  hostility; 
it  was  too  self-centOTed,  self-satisfied,  apprecia- 
ted too  little  the  effect  of  public  opinion,  the 
hostility  which  arises  from  the  use  of  secretive 
methods,  and  the  advantage  of  explaining  its 
actions  to  the  public. 

Especially  in  a  rapidly  growing  democratic 
nation,  it  is  not  reasonable  to  expect  anybody 
to  go  to  special  pains  to  find  out  what  others 
do,  but  everybody,  to  be  judged  fairly,  must 
come  out  before  the  public  and  explain  his  ac- 
tions and  their  reason,  must  be  ready  to  defend 
himself.  This  the  corporations  have  not  done, 
and  their  enemies  have  done  it  for  them,  with 
the  results  seen  to-day. 

In  the  last  years  a  change  has  come  and  more 
and  more  corporations  appreciate  their  respon- 
sibility of  informing  the  public,  and  many  have 
done  very  efficient  and  very  effective  work  in 
giving  the  public  a  better  understanding  of  the 
corporation's  activity.  But  while  technical  and 
engineering  publicity  of  corporation  activity 
has  been  fairly  effccllve,  the  attcmi)ls  of  cor- 
poration men  to  represent  to  the  public  the 

212 


THE  FUTURE  CORPORATION 

social  and  industrial  activity  of  the  corporation 
have  often  been  dismal  failures  and  utterly  un- 
convincing. Most  of  them  were  written  in  the 
style  of  the  lawyer's  brief — that  is,  giving  at 
length  all  the  favorable  features,  and  suppress- 
ing or  glossing  over  the  unfavorable  ones — and 
the  picture  drawn  thus  is  so  obviously  untrue 
that  it  carries  no  conviction.  On  the  other 
hand,  if  a  true  and  fair  representation  is  made 
of  the  corporation  as  modern  industry's  most 
efficient  tool,  as  a  necessary  step  in  the  ad- 
vance of  our  civilization,  as  an  organization  of 
human  beings  and  for  human  beings,  but  as  a 
structure  under  the  laws  of  evolution,  still  im- 
perfect in  some  respects,  open  to  improvements 
in  others,  with  weaknesses  well  recognized  but 
impossible  to  remedy  immediately,  because 
there  are  not  enough  men  big  enough  to  do  it 
— if  this  picture  is  drawn,  the  writer  will  cer- 
tainly find  himself  quoted  by  isolated  sentences 
picked  out  from  his  statements  and  put  to- 
gether so  as  to  represent  exactly  the  opposite 
from  what  he  explained.  If  he  is  a  corpora- 
tion man  it  certainly  will  be  heralded  as  a  con- 
clusive evidence  of  the  badness  of  the  corpo- 
ration,   that     even    a    corporation     man     has 

condemned  it — and  in  reality  he  explained  ex- 
213 


AMERICA  AND  THE  NEW  EPOCH 

actly  the  opposite.  But  such  is  modern  literary 
"art,"  as  we  find  it,  from  daily  newspapers  to 
monthly  magazines;  it  is  dishonest  and  dis- 
honorable to  garble  quotations,  single  out  in- 
dividual sentences,  and  arrange  and  interpret 
them  so  as  to  make  them  give  the  opposite  im- 
pression from  that  which  the  writer  intended 
to  convey,  but,  nevertheless,  many  writers 
and  editors,  who  in  every  other  respect  are 
thoroughly  honest,  would  consider  it  entirely 
proper  by  such  methods  to  make  somebody 
apparently  express  an  opinion  which  he  never 
held. 

Thus  the  situation  stands:  to  explain  the 
corporation  by  giving  only  the  favorable  side, 
only  praise,  is  ineffectual  and  unconvincing, 
because  everybody  realizes  that  nothing  is  per- 
fect. To  give  a  true  representation  would  be 
convincing  to  the  fair-minded  reader,  and 
would  quickly  dispel  the  unjustified  hostility 
now  existing  against  the  corporation.  But  it 
would  by  quotation,  omission,  and  inference  be 
perverted  to  give  exactly  the  opposite  meaning, 
and  thus  is  liable  to  do  harm.  To  say  nothing, 
avoid  all  publication,  as  has  largely  been  done 
heretofore,  makes  the  corporation  helpless 
against  the  intentional  and,  what  often  is  much 

214) 


THE  FUTURE  CORPORATION 

worse,  because  more  impressive,  unintentional 
misrepresentation. 

The  only  remedy  apparent  seems  to  be  to 
entirely  throw  open  the  discussion,  give  infor- 
mation to  the  fullest  extent,  and  count  on  the 
public  gradually  realizing  what  is  unfair  mis- 
representation and  what  is  reasonable.  Here 
most  effective  would  be  the  assistance  of  those 
numerous  writers  who  are  not  connected  wilh 
corporations  nor  with  the  muck-raking  crowd, 
but  have  retained  an  attitude  of  independence 
and  fairness,  and  therefore  are  listened  to  by 
the  fair-minded.  And  there  is  within  the  huge 
modern  industrial  corporation  a  wonderful  field 
of  romance  and  interest,  still  unknown  and  un- 
touched by  any  writer,  which  in  the  hands  of 
a  Kipling  or  a  Jack  London  would  give  most 
wonderful  stories,  more  interesting  and  fasci- 
nating than  any  of  the  tales  or  novels  of  bygone 
ages  of  the  world's  history;  the  creation  of 
prosperous  industrial  cities  in  the  sandy  deserts 
of  the  lake  shore;  the  control  in  the  service  of 
man,  for  power  production  in  the  steam-turbine, 
of  the  steam  jet  which  issues  from  the  high- 
pressure  steam-boiler  at  speeds  so  terrific  that, 
compared  with  it,  the  monster  shells  of  the  high- 
power  guns  which  have  smashed  Europe's 
ii5 


AMERICA  AND  THE   NEW  EPOCH 

strongest  fortifications  are  crawling  with  a 
snail's  pace,  or  the  tragic  search  for  years 
through  all  the  continents  and  islands  of  the 
known  and  unknown  world,  for  a  fiber  to  make 
the  Edison  lamp  filament;  and  when  it  was 
found  and  the  discoverer  returned,  chemistry 
had  in  the  laboratory  created  a  fiber  still  su- 
perior. The  history  of  the  creation  of  the 
United  States  Steel  Corporation,  if  it  could  be 
written,  probably  would  be  more  fascinating 
and  of  more  human  interest  than  the  history  of 
the  birth  of  many  a  nation. 


XVII 

CONCLUSION 

THE  issue  in  the  European  war  essentially  is 
that  between  the  individualistic  era  of  the 
past  and  the  co-operative  era  of  the  future,  and 
whatever  may  be  the  military  results  of  the 
war,  this  issue  is  decided  and  all  civilized  na- 
tions of  Europe  have  abandoned  the  individual- 
is  lie  principle  of  industrial  organization,  and 
have  organized  or  are  organizing  as  rapidly  as 
possible  a  co-operative  system  of  industrial 
l)roduction.  Against  the  vastly  higher  pro- 
ductive efficiency  of  industrial  co-operation  of 
the  European  nations  after  the  war,  our  coun- 
try's individualistic  industrial  organization, 
with  everybody  fighting  against  everybody  else, 
industrially,  politically,  and  socially,  is  hope- 
less, and  America  thus  will  either  fail,  cease  to 
be  one  of  the  world's  leading  industrial  nations, 
or  we  must  also  organize  a  system  of  industrial 
production  based  on  co-operation  and  not  on 

217 


AMERICA  AND  THE  NEW   EPOCH 

competition.  That  is,  we  must  enter  the  co- 
operative era,  or  fall  by  the  wayside. 

America's  national  temperament  is  demo- 
cratic, our  methods  of  organization  thus  con- 
central — that  is,  from  the  individual  units  to  the 
central  organism — while  all  the  European  na- 
tions are  of  monarchical  temperament,  their 
methods  of  organization  thus  decentral,  from  a 
strong  central  government — political  or  finan- 
cial— toward  the  individual. 

Thus  we  cannot  copy,  nor  even  benefit  to 
any  extent,  from  the  experience  of  Europe's  re- 
organization, but  must  work  out  our  own  sal- 
vation, on  new  democratic  lines,  a  problem  far 
greater  and  more  difficult. 

The  most  promising  structural  element  of  the 
future  co-operative  industrial  organization,  in 
our  present  nation,  is  the  industrial  corporation, 
and  on  this  probably  the  structure  of  co-oper- 
ative industrial  society  will  be  built  in  our 
democratic  nation. 

A  positive,  administrative,  and  executive  in- 
dustrial government,  i)rofessionally  comi)etent, 
continuous  and  permanent,  by  an  industrial 
senate.  A  negative  tribuniciate,  with  no  ex- 
ecutive or  administrative  power,  but  with 
superior  inhibitory  and  supervisory  power,  re- 

218 


CONCLUSION 

sponsible  and  rapidly  responsive  to  all  the 
citizens  of  the  nation. 

Such  a  co-operative  democratic  common- 
wealth would  be  superior  in  efficiency  to  the 
monarchical  co-operative  industrial  organiza- 
tions of  Europe,  just  as  much  as  the  Roman 
Republic  was  superior  to  all  other  communities 
of  the  classic  age. 

But  the  first  requirements  for  the  possibility 
of  such  co-operative  democratic  organization 
are  racial,  industrial,  and  political  unity. 
There  must  be  no  racial  antagonism.  The  an- 
tagonism and  fight  between  the  political  organi- 
zations, nation.  State,  and  municipality  and 
the  industrial  organizations  must  cease  and  an 
intelligent  understanding  between  the  public 
and  the  industrial  corporations  must  be  estab- 
lished. Most  of  all,  however,  the  foremost 
causes  of  indifference  and  antagonism  of  the 
masses  of  producers  against  the  producing  or- 
ganizations must  be  eliminated  bj'  an  efficient 
and  effective  establishment  of  the  right  of  every- 
body to  live  in  his  accustomed  social  standard, 
and  the  duty  to  work  when  capable.  It  means 
the  recognition  as  the  fundamental  principle  of 
civilized  society  of  the  first  connnandment  of 
the  Bible,  "Where  is  thy  brother?"    And  the 

219 


AMERICA  AND  THE  NEW  EPOCH 

outlawing,  forever,  of  Cain's  answer,  "Am  I 
my  brother's  keeper?" 

Political  legislation,  or  industrial  organiza- 
tion, or  a  combination  of  both,  may  bring  about 
this  social  reconstruction,  and  the  rapidly  in- 
creasing interest,  within  the  corporation,  in 
social  activity,  promises  well  in  this  direction. 
With  this  accomplished,  and  the  enormous 
number  of  the  emplo^'ees  of  the  industrial  cor- 
porations thereby  attached  to  the  interests  of 
the  corporations  and  ready  for  the  defense  of 
the  corporations — just  as  the  millions  of  the 
German  Social  Democracy  were  by  the  social 
legislation  attached  to  the  nation  and  ready  for 
its  defense — with  this  accomplished,  quickly 
the  political  power  would  shift  and  the  political 
government,  instead  of  outlawing  and  fighting 
corporate  success  and  business,  would  be 
brought  into  co-operation  with  the  industrial 
corporation,  and  from  thereon  the  progress 
toward  democratic  co-operative  industrial  or- 
ganization would  be  steady  and  rapid. 

Internationally  the  co-operative  era  would 
bring  about  material  changes:  with  production 
controlled,  first  nationally  and  then  inter- 
nationally, by  the  demand  for  the  product,  and 
production   for   the  mere  profit  of  producing 

220 


CONCLUSION 

eliminated  as  uneconomical,  much  of  the  inter- 
national competition  for  the  markets  of  the 
world  would  cease,  and  with  it  most  of  the 
causes  of  war.  The  secondary  nations  would 
come  within  the  sphere  of  influence,  under  the 
political  and  industrial  guidance  of  the  world's 
leading  industrial  nations.  Thus  our  country's 
influence  would  extend  over  our  continent  and 
its  territorial  waters. 

International  commerce  as  a  system  of  com- 
petition for  profit  would  cease,  but  would  re- 
main and  even  extend  in  dealing  with  those 
things  which  one  nation,  or  one  territory,  can 
produce  better  or  more  conveniently  than 
another. 

But  with  international  competition  ended 
and  co-operation  established,  international  war 
also  would  become  an  impossibility  as  a  matter 
of  course,  as  there  would  be  no  causes  for  war. 
Thus  no  international  court  of  justice,  no 
world's  congress  or  international  police  force, 
or  other  such  impossibilities  would  be  needed, 
but  war  between  nations  would  simply  become 
unthinkable,  just  as  it  would  be  unthinkable 
to-day,  if  the  heads  of  two  dei)artments  within 
the  same  corporation  disagree  about  some  mat- 
ter, that  the  members  of  the  two  departments 

221 


AMERICA  AND  THE  NEAV  EPOCH 

go  out  with  clubs  and  pistols  to  fight  out  the 
disagreement. 

And  how  about  socialism?  As  a  matter  of 
fact,  international  industrial  co-operation  would 
be  so  near  socialism,  would  so  imperceptibly 
merge  into  it,  that  nobody  would  ever  be  able 
to  see  where  "capitalistic  society"  ended  and 
the  "socialistic  commonwealth"  began — though 
it  is  obvious  that  this  socialistic  commonwealth 
will  be  as  different  from  the  dreams  of  us 
socialists  of  to-day  as  every  accomplished 
progress  always  has  been  from  the  first  crude 
ideas  of  its  originators. 

But  suppose  we  do  not  succeed  in  bringing 
about  the  racial  unity,  or  the  industrial  unity, 
or  the  political  unity,  which  is  required  for  the 
co-operative  industrial  organization  of  our 
nation.    What  then? 

Suppose  a  serious  racial  antagonism  should 
arise  in  our  nation,  as  the  result  of  the  European 
war,  between  the  Anglo-Saxon  on  the  one  side, 
and  the  citizens  of  German  and  Celtic  descent 
on  the  other  side;  the  Anglo-Saxon  would  prob- 
ably score  at  first;  by  his  greater  initiative,  by 
his  control  of  much  of  the  political  and  indus- 
trial machinery,  he  would,  by  organizing  the 

Slav  and  Mediterranean,   by  political,   indus- 

^2i 


/       CONCLUSION 

trial,  anu  social  pressure,  drive  tlie  citizens  of 
Celtic  and  German  descent  from  power,  and 
practically,  if  not  even  legally,  disfranchise 
them.  But  then,  deprived  of  the  organizing 
ability  of  the  German,  the  administrative 
ability  of  the  Celt,  and  with  the  Anglo-Saxon's 
tontempt  for  the  "lower"  races,  very  soon  the 
Slav  and  Mediterranean  would  rise  in  political 
revolt  and  thus  finally  the  Anglo-Saxon  would 
disappear  from  our  national  organism,  just  as 
the  Aryans,  which  once  created  India's  ancient 
civilization,  have  long  disappeared.  With  the 
strongly  collectivistic  temperament  of  most 
Slav  and  Mediterranean  nations,  and  the 
individualistic  races,  Anglo-Saxon  and  Teuton, 
hostile  against  each  other,  probably  the  collec- 
tivistic— that  is,  monarchical — temperament 
would  get  into  control  of  our  nation,  that  is, 
democracy  would  cease  and  a  monarchical 
state  supervene;  probably  a  Caesarism  rising 
on  the  military  machine  created  by  the  Anglo- 
Saxon. 

Thus,  united  we  stand,  divided  we  fall,  ap- 
plies racially  to  our  country  more  than  any- 
where else. 

Fortunately,    there   is   hardly   the   remotest 

possibility  of  such  racial  antagonism  making 
15  223 


AMERICA  AND  THE  NEW  KT'OCH 

headway  In  our  nation,  but  the  attempts  of 
stirring  up  racial  hatred  will  undoubtedly  meet 
the  fate  of  the  former  Know-Nothing  party. 

-Granting  thus  racial  unity,  what  then,  if  in- 
dustrial unity  cannot  be  established;  if  our 
industrial  leaders,  our  political  leaders,  fail  to 
grasp  the  opportunity  of  insuring  the  masses  oi 
producers  against  unemployment,  sickness,  old 
age,  and  if  indifference,  antagonism,  and  indus- 
trial strife  remain,  or  if  we  fail  to  realize  the 
immediate  importance  and  urgency  of  bringing 
about  better  relations,  and  things  continue  to 
drift?  The  corporation  would  accomplish  little, 
if  anything,  in  industrial  reorganization,  as  it 
would  not  be  supported  from  within,  its  em- 
ployees, nor  from  without,  the  general  public. 
The  demand  for  the  political  government  to 
step  in,  which  already  is  strong  and  general, 
would  naturally  increase.  The  political  govern- 
ment— municipal.  State,  and  especially  the  Fed- 
eral Government— would  take  over  more  and 
more  industrial  activities;  supervision  of  the 
railroads  by  an  interstate  commerce  conmiis- 
sion,  extending  into  control,  and  finally  admin- 
istration and  ownership  of  the  railroads  would 
follow;  the  same  action  extend  to  all  other 
means  of  communication,  as   telegraph,  tele- 

224 


CONCLUSION 

phone,  etc".  Industrial  supervision  and  con- 
trol by  an  interstate  trade  commission  would 
come,  entering  more  and  more  into  the  internal 
economy,  direction,  and  finally  operation  and 
practical  ownership  of  industries.  Simultane- 
ous therewith  an  extended  governmental  activ- 
ity in  the  ownership  and  operation  of  canals, 
reclamation  works,  mines,  steamship  lines,  ship- 
yards, farms,  etc.  The  final  result  thus  would 
be  an  industrial  reorganization  of  our  nation  by 
the  political  government,  the  Federal  Govern- 
ment superseding  the  industrial  corporations. 

Necessarily,  to  accomplish  this,  the  govern- 
ment must  be  far  more  permanent,  competent, 
and  efficient  than  our  present  political  govern- 
ment, and  commissions,  made  as  competent  and 
permanent  as  possible,  would  take  over  most  of 
the  work  of  industrial  control  and  operation, 
the  direct  elective  officials  mainly  acting  in 
supervisory  capacity,  directing  the  policies  of 
the  commissions.  Such  organizations,  if  once 
created,  would  probably  be  as  efficient  and  sat- 
isfactory as  the  industrial  government  devel- 
oped from  the  industrial  corporation  would  be. 

However,  it  would  require  an  entire  change 
of  our  governmental  system,  the  creation  of  a 
strong   centralized   government,    like   that   of 

225 


AMERICA  AND  THE  NEW  v^'OCH 

many  European  nations,  the  introduciion  of  de- 
central  methods  of  dealing  with  progress  and 
development.  This  would  be  possible  only  by 
a  change  of  our  national  temperament  from 
democratic  to  monarchical — that  is,  from  indi- 
vidualistic to  collectivistic. 

The  general  character  of  the  later  immigration 
is,  indeed,  far  more  collectivistic  than  that  of 
the  earlier  immigration,  and  thereby  there  is 
produced  a  tendency  of  the  nation  toward  col- 
lectivistic temperament,  which  is  held  in  check 
by  the  influence  of  the  earlier,  more  individual- 
istic elements,  but  is  growing  and  would  prob- 
ably gain  the  more  headway,  the  longer  the 
present  chaotic  condition  persists.  This  drift 
may  gradually  change  our  national  character 
so  as  to  make  the  existence  of  a  strong  and 
stable  centralized  government  possible,  and 
thereby  a  control  of  the  co-operative  industrial 
system  by  the  political  government,  as  it  exists, 
for  instance,  in  Germany. 

However,  it  will  be  a  matter  of  generations 
before  our  national  temperament,  by  collectiv- 
istic immigration  and  elimination  of  the  individ- 
ualistic strain,  has  changed  sufficiently;  and 
industrial   progress  and   reorganization   in   the 

co-operative  era  is  so  rapid  abroad,  that  long 

226 


\ 

t 

CONCLUSION 

before  America's  national  character  could  have 
changed  so  far  as  to  make  industrial  reorgani- 
zation by  a  centralized  political  government 
possible,  America  as  an  industrial  nation  would 
have  ceased  to  exist,  in  competition  with  the 
highly  organized  and  highly  efficient  co-opera- 
tive industrial  organizations  of  Europe. 

Thus  the  time  element  defeats  the  possibility 
of  political  industrial  reorganization  of  our  na- 
tion. 

But  what  then  will  happen  to  America  if 
we  cannot  bring  about  the  co-operative  indus- 
trial reorganization  necessary  to  meet  a  re- 
constructed Europe  in  the  new  era.'^ 

Exportation  of  industrial  products  naturally 
will  quickly  cease,  as  with  our  inefficient  in- 
dividualistic production  we  cannot  meet  in  the 
markets  of  the  world  the  competition  of  the 
co-operatively  organized  nations. 

Exportation  of  raw  materials,  of  agricultural 
products .^^  Already  to-day  our  excess  produc- 
tion of  agricultural  products,  etc.,  over  our  home 
consumption  is  not  great,  and  is  with  the  in- 
creasing population  rapidly  decreasing,  and  that 
while  we  are  still  using  our  natural  resources. 
But  with  these  exhausted  in  the  near  future, 
with  our  inefficient  and  crude  methods  of  agri- 


AMERICA  AND  THE  NE\\   %         '.  ^ 

culture  and  production,  we  soon  will  have  no 
surplus  to  export,  but  need  all  that  we  produce 
to  feed  our  own  population.  With  no  industrial 
products  to  export,  this  means,  in  case  of  crop 
failure  or  other  accidents,  famine,  or  importa- 
tion without  equivalent  to  export — that  is, 
impoverishment  of  the  nation.  Thus  gradually 
our  present  process  of  increasing  in  wealth  will 
reverse;  we  will  get  poorer,  mortgage  our 
country's  lands,  mines,  etc.,  to  foreign  capital, 
and  in  the  future  then  stands  the  fate  of  the 
Mexico,  the  India  of  to-day;  a  country  owned 
and  exploited  by  foreign  capital,  for  the  benefit 
of  foreigners,  but  with  the  natives — the  de- 
scendants of  the  Americans  of  to-day — as  the 
exploited.  Berlin  or  London  as  the  financial 
and  industrial  center  of  the  world,  America  as  a 
country  of  plantations,  of  mines,  and  industrial 
establishments,  owned,  managed,  and  directed 
by  foreigners  and  for  foreign  profit,  with  native 
American  peon  labor. 

Such  is  fate,  such  is  the  law  of  evolution: 
there  is  no  standstill;  either  you  swim  or  sink; 
either  we  enter  the  coming  co-operative  era  of 
the  world's  history  and  take  our  place  as  one 
of  the  leading  industrial  nations  organized  for 
the  highest  efficiency  possible  under  co-operative 

228 


CONCLUSION 

industrial  production,  or  wc  fall  by  the  wayside, 
cease  to  be  one  of  the  world's  leading  nations, 
and  merely  become  a  field  of  exploitation,  a 
sphere  of  European  influence,  to  be  parceled 
out  like  China. 


THE  END 


4v'0CH 


II 


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